Striatal projection medium spiny neurons (MSNs) play key roles in basal ganglia circuits by integrating excitatory corticostriatal and thalamostriatal input with modulatory nigrostriatal dopamine (DA) input. MSNs express specific sets of genes involved in intercellular communication and intracellular signaling, some being highly enriched in all MSNs with others specific to either D1-DA receptor-containing striatonigral or D2-DA receptor-containing striatopallidal neurons. Whereas the role of many of them remains to be investigated, much research has focused on the regulation of protein phosphatases. Three small regulatory phosphoproteins, termed DARPP-32 (dopamine-and cAMP-regulated phosphoprotein), RCS (regulator of calmodulin signaling) and ARPP-16, play key roles in DA signaling by regulating the activity of three of the four major classes of serine/threonine protein phosphatases. We provide here an overview of the main characteristics of signaling in MSNs with a focus on the role of protein phosphatase regulation in mediating the modulatory role of DA.