Background: protein Ser/Thr Phosphatase PPP1CC2 is an alternatively spliced isoform of PPP1C that is highly enriched in testis and selectively expressed in sperm. Addition of the phosphatase inhibitor toxins okadaic acid or calyculin A to caput and caudal sperm triggers and stimulates motility, respectively. Thus, the endogenous mechanisms of phosphatase inhibition are fundamental for controlling sperm function and should be characterized. Preliminary results have shown a protein phosphatase inhibitor activity resembling PPP1R2 in bovine and primate spermatozoa. Results: here we show conclusively, for the first time, that PPP1R2 is present in sperm. In addition, we have also identified a novel protein, PPP1R2P3. The latter was previously thought to be an intron-less pseudogene. We show that the protein corresponding to the pseudogene is expressed. It has PPP1 inhibitory potency similar to PPP1R2. The potential phosphosites in PPP1R2 are substituted by non-phosphorylable residues, T73P and S87R, in PPP1R2P3. We also confirm that PPP1R2/PPP1R2P3 are phosphorylated at Ser121 and Ser122, and report a novel phosphorylation site, Ser127. Subfractionation of sperm structures show that PPP1CC2, PPP1R2/PPP1R2P3 are located in the head and tail structures. Conclusions: the conclusive identification and localization of sperm PPP1R2 and PPP1R2P3 lays the basis for future studies on their roles in acrosome reaction, sperm motility and hyperactivation. An intriguing possibility is that a switch in PPP1CC2 inhibitory subunits could be the trigger for sperm motility in the epididymis and/or sperm hyperactivation in the female reproductive tract.