Photoaffinity labeling of calcineurin by 1,2-distearoyl-sn-glycero-3-phospho-N-(4-azido-3-[125I]iodo-2- hydroxybenzoyl)ethanolamine resulted in preferential labeling of its regulatory B subunit. Photolabeling of B was greatly enhanced by Ca2+ which further supports the hypothesis that the phospholipid-binding site of calcineurin is located on this Ca2(+)-binding subunit. Extending the time of incubation of calcineurin with the photoprobe prior to photolysis also elevated labeling of the B subunit, probably as a result of time-dependent changes in protein conformation. Support for these conformational changes was obtained when time-dependent preincubation of calcineurin with acidic phospholipids enhanced subsequent tryptic degradation of its B subunit. Activity measurements and analyses of the reversibility of phospholipid-binding provided evidence for a two-stage mechanism of calcineurin-phospholipid interactions. Initial binding of calcineurin to phospholipids is rapid, Ca2(+)-sensitive, reversible, and leads to stimulation of the phosphatase toward a number of its substrates. A subsequent slow phase strengthens the association and appears to correlate with the phospholipid-promoted conformational change of the B subunit; the corresponding time-dependent effects on enzymatic activity are, again, substrate-dependent.