Protein phosphorylation is involved in the regulation of a wide variety of physiological processes in the nervous system. Studies in which purified protein kinases or kinase inhibitors have been microinjected into defined cells while a specific response is monitored have demonstrated that protein phosphorylation is both necessary and sufficient to mediate responses of excitable cells to extracellular signals. The precise molecular mechanisms involved in neuronal signal transduction processes can be further elucidated by identification and characterization of the substrate proteins for the various protein kinases. The roles of three such substrate proteins in signal transduction are described in this article: 1) synapsin I, whose phosphorylation increases neurotransmitter release and thereby modulates synaptic transmission presynaptically; 2) the nicotinic acetylcholine receptor, whose phosphorylation increases its rate of desensitization and thereby modulates synaptic transmission postsynaptically; and 3) DARPP-32, whose phosphorylation converts it to a protein phosphatase inhibitor and which thereby may mediate interactions between dopamine and other neurotransmitter systems. The characterization of the large number of additional phosphoproteins that have been found in the nervous system should elucidate many additional molecular mechanisms involved in signal transduction in neurons.