We have made use of the cell-free SV40 DNA replication system to identify and characterize cellular proteins required for efficient DNA synthesis. One such protein, replication protein C (RP-C), was shown to be involved with SV40 large T antigen in the early stages of viral DNA replication in vitro. We demonstrate here that RP-C is identical to the catalytic subunit of cellular protein phosphatase 2A (PP2Ac). The purified protein dephosphorylates specific phosphoamino acid residues in T antigen, consistent with the hypothesis that SV40 DNA replication is regulated by modulating the phosphorylation state of the viral initiator protein. We also show that purified RP-C/PP2Ac preferentially stimulates SV40 DNA replication in extracts from early G1 phase cells. This finding suggests that the activity of a cellular factor that influences the net phosphorylation state of T antigen is cell cycle dependent.