The γ134.5 protein of herpes simplex virus (HSV) type 1 functions to prevent the shutoff of protein synthesis mediated by the double-stranded-RNA-dependent protein kinase PKR. This is because γ134.5 associates with protein phosphatase 1 (PP1) through its carboxyl terminus, forming a high-molecular-weight complex that dephosphorylates the α subunit of translation initiation factor eIF-2 (eIF-2α). Here we show that Val193Glu and Phe195Leu substitutions in the PP1 signature motif of the γ134.5 protein abolished its ability to redirect PP1 to dephosphorylate eIF-2α and replication of mutant viruses was severely impaired. The γ134.5 protein, when expressed in Sf9 cells using a recombinant baculovirus, was capable of directing specific eIF-2α dephosphorylation. Deletions of amino acids 258 to 263 had no effect on activity of γ134.5. However, deletions of amino acids 238 to 258 abolished eIF-2α phosphatase activity but not PP1 binding activity. Interestingly, deletions in the AlaArg motif of the carboxyl terminus disrupted the high-molecular-weight complex that is required for dephosphorylation of eIF-2α. These results demonstrate that γ134.5 is functionally active in the absence of any other HSV proteins. In addition to a PP1 binding domain, the carboxyl terminus of γ134.5 contains an effector domain that is required to form a functional complex.