The signal protein PII is one of the most highly conserved signaling proteins in nature, being present
in bacteria, archaea and eukarya (plants). As far as investigated to date, PII-proteins play a key role in the
co-ordination of the cellular carbon- and nitrogen metabolism. In most bacteria, this protein is uridylylated
in response to the cellular glutamine level. Moreover, this protein binds ATP and 2-oxogluatarate in a
mutually dependent manner. Depending on the state of metabolite binding and uridylylation, PII
signals the balance of the cellular C/N status. In cyanobacteria, a PII homologous protein was found which
also signals the C/N balance. In contrast to most bacteria, the cyanobacterial PII protein is not modified by
uridylylation, but rather by serine-phosphorylation, similar to eukaryotic signal transduction proteins. We are
analyzing the mechanism of signal transduction and the regulatory effects by PII. Recently, we could identify
the cellular phospho-PII phosphatase from the cyanobacterium Synechocystis PCC 6803, a PP2C-type
phosphatase, which belongs to a novel group of bacterial PP2C homologues. The enzyme, termed PphA,
is the first phosphatase of this group with known physiological function, and by biochemical studies, we
characterized its catalytic proterties. In vitro studies of phosho-PII dephosphorylation showed that this
process not only is regulated by the central metabolite of carbon/nitrogen metabolism, 2-oxoglutarate,
but also responds to oxaloacetate and is sensitive to the energy charge of the cells through differential
ATP-binding.  Analysis of this versatile biological signal integration device could lead to new insights into
the evolution of information processing systems in nature.