Neurogranin is a neural-specific, calmodulin (CaM)-binding protein that is phosphorylated by protein kinase C (PKC) within its IQ domain at serine 36. Since CaM binds to neurogranin through the IQ domain, PKC phosphorylation and CaM binding are mutually exclusive. Consequently, we hypothesize that neurogranin may function to concentrate CaM at specific sites in neurons and release free CaM in response to increased Ca2+ and PKC activation. However, it has not been established that neurogranin interacts with CaM in vivo. In this study, we examined this question using yeast two-hybrid methodology. We also searched for additional proteins that might interact with neurogranin by screening brain cDNA libraries. Our data illustrate that CaM binds to neurogranin in vivo and that CaM is the only neurogranin-interacting protein isolated from brain cDNA libraries. Single amino acid mutagenesis indicated that residues within the IQ domain are important for CaM binding to neurogranin in vivo. The Ile-33 --> Gln point mutant completely inhibited and Arg-38 --> Gln and Ser-36 --> Asp point mutants reduced neurogranin/CaM interactions. These data demonstrate that CaM is the major protein that interacts with neurogranin in vivo and support the hypothesis that phosphorylation of neurogranin at Ser-36 regulates its binding to CaM.