The phosphatase activity of the homodimeric NRII protein of Escherichia coli is activated by the PII protein and requires all three domains of NRII. Mutations in the N-terminal domain (L16R), central domain (A129T), C-terminal domain PII-binding site (S227R), and C-terminal domain ATP-lid (Y302N) of NRII result in diminished phosphatase activity. Here, we used heterodimers formed in vitro from purified homodimeric proteins to study the phosphatase activity. A129T, S227R, and Y302N mutant subunits and A129T/S227R, A129T/Y302N, and S227R/Y302N double-mutant subunits formed stable heterodimers and were amenable to analysis; heterodimers containing these mutant subunits in various combinations were formed and their activities assessed. Complementation of the PII-activated phosphatase activity was observed in heterodimers containing S227R and Y302N subunits and in heterodimers containing A129T and Y302N subunits, but not in heterodimers containing A129T and S227R subunits. Complementation of the PII-activated phosphatase activity was also observed in heterodimers containing A129T/S227R and Y302N subunits, but not in heterodimers containing A129T/Y302N and S227R subunits. Finally, inclusion of an S227R/Y302N subunit in a heterodimer with a subunit having wild-type phosphatase activity resulted in a dramatic decrease in phosphatase activity, while inclusion of an A129T/S227R subunit did not. These results suggest that the phosphatase activity of NRII requires the collaboration of the PII-binding site from one subunit of the dimer, the central domain from the same subunit, and the ATP-lid from the opposing subunit, in addition to the undefined N-terminal domain requirement(s).