Protein phosphatase Y (PPY) is a Drosophila testis-specific enzyme of unknown function. In a yeast two-hybrid screen we identified CG15031/PPYR1 as a PPY interacting protein. The specificity of the protein-protein interaction was proven by directed two-hybrid tests. The complex formation between PPY and PPYR1 was confirmed under in vitro and in vivo conditions by plasmon resonance spectroscopy, co-immunoprecipitation, and pull down experiments. Recombinant PPYR1 expressed in Escherichia coli is a heatstable, protease sensitive, intrinsically unstructured RNA-binding protein that migrates anomalously in SDS-polyacrylamide gel electrophoresis. It can be phosphorylated by cAMP-dependent protein kinase in vitro. PPYR1 moderately inhibits PPY activity, the inhibitory potential of the protein is slightly increased by phosphorylation. We suggest that PPYR1 may function as a scaffolding protein that targets PPY to RNA and other protein partners in Drosophila melanogaster.