Liver extracts (8000 × for 10 min) from fasted rats contain about 4 times more phosphorylase phosphatase activity when the liver was homogenized in a hypotonic medium or frozen before homogenization. This increase is caused by: (i) release of partially latent phosphatases (r=60 000 and 45 000 in sucrose gradient centrifugation) from ruptured organelles; (ii) rapid activation of phosphatase in the ruptured pellet by endogenous protease(s) which can be blocked by p-tosyl-L-lysine chloromethyl ketone. Only the r=60 000 enzyme, associated with the nuclei, can be activated proteolytically, with conversion to an r=45 000.