The retinoblastoma tumor suppressor Rb is regulated by reversible phosphorylation that is dependent upon cyclin-dependent kinase (CDK) and protein phosphatase type 1 (PP1) activity in replicating cells. Hyperphosphorylated Rb allows cells to proliferate, whereas the hypophosphorylated isoform of Rb inhibits proliferation. Of the many phosphorylation sites of Rb, there is functional information available for a very few. In this report, we show that threonine-821 (Thr-821) of Rb is dephosphorylated earlier than other phosphorylation sites when cells are grown under hypoxic conditions which leads to Rb activation and G(1) arrest. This finding is interesting because Thr-821 of Rb remains phosphorylated throughout the cell division cycle in replicating cells. We hypothesized that the phosphorylation state of Thr-821 of Rb may depend on cellular stress. We report in this study that, when nontransformed CV1 epithelial cells and Hs578T breast cancer cells are treated with the chemotherapeutic agent cytosine arabinoside (Ara-C), Thr-821 of Rb is rapidly dephosphorylated concomitant with dissociation of the PP1 regulatory subunit PNUTS (phosphatase nuclear targeting subunit) from PP1 enzyme. These data are consistent with the concept that differential regulation of Rb-directed phosphatase activity exists when cells are progressing through the cell cycle compared to that observed when cells are under stress.