The phosphorylated form of liver glycogen phosphorylase (alpha-1,4-glucan : orthophosphate alpha-glucosyl-transferase, EC 18.104.22.168) (phosphorylase a) is active and easily measured while the dephosphorylated form (phosphorylase b), in contrast to the muscle enzyme, has been reported to be essentially inactive even in the presence of AMP. We have purified both forms of phosphorylase from rat liver and studied the characteristics of each. Phosphorylase b activity can be measured with our assay conditions. The phosphorylase b we obtained was stimulated by high concentrations of sulfate, and was a substrate for muscle phosphorylase kinase whereas phosphorylase a was inhibited by sulfate, and was a substrate for liver phosphorylase phosphatase. Substrate binding to phosphorylase b was poor (KM glycogen = 2.5 mM, glucose-1-P = 250 mM) compared to phosphorylase a (KM glycogen = 1.8 mM, KM glucose-1-P = 0.7 mM). Liver phosphorylase b was active in the absence of AMP. However, AMP lowered the KM for glucose-1-P to 80 mM for purified phosphorylase b and to 60 mM for the enzyme in crude extract (Ka = 0.5 mM). Using appropriate substrate, buffer and AMP concentrations, assay conditions have been developed which allow determination of phosphorylase a and 90% of the phosphorylase b activity in liver extracts. Interconversion of the two forms can be demonstrated in vivo (under acute stimulation) and in vitro with little change in total activity. A decrease in total phosphorylase activity has been observed after prolonged starvation and in diabetes.