Myosin light chain phosphatase (PP1M) is composed of three subunits, i.e., M20, MBS and a catalytic subunit. While MBS is assigned as a myosin binding subunit, the function of M20 is unknown. In the present study, we found that M20 binds to microtubules. The binding activity was revealed by co-sedimentation of M20 with microtubules and the binding of tubulin to M20 affinity resin. Green fluorescent protein (GFP) tagged M20 (M20-GFP) was expressed in chicken primary smooth muscle cells and Cos7 cells, and used as a probe for studying the association between M20 and microtubules in living cells. M20-GFP was localized on filamentous structures in both cell types. Co-localization analysis revealed that M20-GFP co-localized with tubulin. Treatment with nocodazole, but not cytochalasin B, abolished the filamentous structure of M20-GFP. These results indicate that M20-GFP associates with microtubules in cells. Micro-injection of rhodamine-tubulin into the M20 expressing cells revealed that the incorporation of rhodamine-tubulin into microtubules was significantly facilitated by microtubule-associated M20. Consistent with this result, M20 enhanced the rate of tubulin polymerization in vitro and produced elongated microtubules. These results suggest that M20 has a microtubule binding activity and plays a role in regulating microtubule dynamics.