The homodimeric light chains LC8 and Tctex-1 are integral parts of the microtubule motor cytoplasmic dynein, as they directly associate with dynein intermediate chain IC and various cellular cargoes. These light chains appear to regulate assembly of the dynein complex by binding to and promoting dimerization of IC. In addition, both LC8 and Tctex-1 play roles in signaling, apoptosis, and neuronal development that are independent of their function in dynein, but it is unclear how these various activities are modulated. Both light chains undergo specific phosphorylation, and here we present biochemical and NMR analyses of phosphomimetic mutants that indicate how phosphorylation may regulate light chain function. For both LC8 and Tctex-1, phosphorylation promotes dissociation from IC while retaining their binding activity with other non-dynein proteins. Although LC8 and Tctex-1 are homologs having a common fold, their reduced affinity for IC upon phosphorylation arises by different mechanisms. In the case of Tctex-1, phosphorylation directly masks the IC binding site at the dimer interface, whereas for LC8, phosphorylation dissociates the dimer and indirectly eliminates the binding site. This modulation of the monomer-dimer equilibrium by phosphorylation provides a novel mechanism for discrimination among LC8 binding partners.