[en] NADH inhibits PDH/sub b/ phosphatase activity when ³²P-PDH is associated with the intact complex but not when ³²P-PDH is prepared free of other components of the complex. Addition of the transacetylase-protein X (E2-X) subcomplex both activated the phosphatase and restored NADH inhibition. Low levels of dihydrolipoyl dehydrogenase associated with the subcomplex might be required for NADH inhibition. Dihydrolipoamide gave inhibition of the phosphatase equivalent to NADH and the combination did not give additional inhibition suggesting a common mechanism. Pretreatment of phosphorylated complex and phosphatase with 2.0 mM dithiothreitol nearly eliminated inhibition of the phosphatase by NADH or dihydrolipoamide. Strong arsenite inhibition of phosphatase activity occurred only in the presence of NADH suggesting modification of thiols reduced by NADH can alter phosphatase activity. Only about 6 molecules of purified phosphatase could be activated by 1 molecule of E2-X subcomplex (initial velocities measured in 15s period). Since that corresponded to the number of protein X rather than E2 subunits, protein X may contribute to the Ca²⁺-dependent binding of the phosphatase. Since protein X also contains a lipoyl moiety, it may also contribute to NADH inhibition of the phosphatase