Previous work from our laboratory and others has established that SPAK/PASK (Ste-20 related Proline-Alanine-rich Kinase) is central to the regulation of NKCC1 function. WNK4 (With No lysine (K) kinase) has also been implicated in the regulation of NKCC1 activity through upstream activation of SPAK. Because previous studies from our laboratory also demonstrated a protein-protein interaction between SPAK and AATYK (Apoptosis-Associated Tyrosine Kinase), we explore here the possibility that AATYK is another component of the regulation of NKCC1. Heterologous expression of AATYK1 in NKCC1-injected Xenopus laevis oocytes markedly inhibited cotransporter activity under isosmotic conditions. Interestingly, mutation of key residues in the catalytic domain of AATYK1 revealed that the kinase activity does not play a role in the suppression of NKCC1 function. However, mutagenesis of the two SPAK-binding motifs in AATYK1 completely abrogated this effect. As protein phosphatase 1 (PP1) also plays a central role in the dephosphorylation and inactivation of NKCC1, we investigated the possibility that AATYK1 interacts with the phosphatase. We identified a PP1 docking motif in AATYK1 and demonstrated interaction using yeast-2-hybrid analysis. Mutation of a key valine residue (V1175) within this motif prevented protein-protein interaction. Furthermore, the physical interaction between PP1 and AATYK was required for inhibition of NKCC1 activity in Xenopus laevis oocytes. Taken together, our data are consistent with AATYK1 indirectly inhibiting the SPAK/WNK4 activation of the cotransporter by scaffolding an inhibitory phosphatase in proximity to a stimulatory kinase.