The cyclic interconversion of enzymes between phosphorylated and unphosphorylated forms comprises a major mechanism of cellular regulation. A theoretical analysis of reversible covalent modification systems (Stadtman, E.R., and Chock, P.B. (1977) Proc. Natl. Acad. Sci. U.S.A. 74, 2761-2765) revealed that they are endowed with extraordinary regulatory capacities; they may exhibit smooth, flexible responses to changes in single and multiple metabolite levels, signal amplification, and apparent positive cooperativity. To test qualitatively and quantitatively the theories and equations involved in this analysis, a model in vitro phosphorylation/dephosphorylation cyclic cascade was developed in which the converter enzymes catalyzing the covalent modifications were cAMP-dependent protein kinase (EC 2.7.1.37; type II) and phosphoprotein phosphatase (EC 3.1.3.16; Mr = 38,000), both purified to near homogeneity from bovine heart. The kinetic constants for both enzymes were fully characterized using the nanopeptide Leu-Arg-Arg-Ala-Ser-Val-Ala-Gln-Leu as the interconvertible substrate, cAMP as an activator for the kinase, and Pi as an inhibitor for the phosphatase. In the presence of a nearly constant concentration of ATP, a steady-state level of phosphorylation of the peptide was attained which was determined by the relative concentrations of the kinase, phosphatase, and effectors. As predicted by the cyclic cascade model, this monocyclic cascade exhibited both signal amplification and an increase in sensitivity to variations in multiple effector concentrations. In addition, the data show that the steady-state level of phosphorylation obtained in the presence of an activator of the kinase (e.g. cAMP) and an inhibitor of the phosphatase (e.g. Pi) is a function of the product of the relative effector concentrations. Finally, the results reveal that when the concentration of enzyme-substrate complex is not negligible, cyclic cascades are potentially more sensitive to variations in effector concentrations and can achieve even greater signal amplification than predicted previously.