A yeast glc7-1 mutant expressing a variant of protein phosphatase type 1 fails to accumulate glycogen. This defect is associated with hyperphosphorylated and inactive glycogen synthase, consistent with Glc7p acting directly to dephosphorylate and activate glycogen synthase. To characterize the glycogen synthesis defect of this mutant in more detail, we isolated 26 pseudorevertants of the glc7-1 mutant. All pseudoreversion events were due to missense mutations in GSY2, the gene encoding the major isoform of glycogen synthase. A majority of the mutations responsible for the suppression were in the 3' end of the gene, corresponding to the phosphorylated COOH terminus of Gsy2p. Phosphorylation of the mutant proteins was reduced, suggesting that they are poor substrates for glycogen synthase kinases. Suppressor mutations outside this domain did not decrease the phosphorylation of the resulting proteins, indicating that these proteins are immune to the regulatory effects of phosphorylation. Since no growth defect has been observed for strains with altered glycogen levels, the relative levels of fitness of GSY2 mutants that fail to accumulate glycogen and that hyperaccumulate glycogen were assayed by cocultivation experiments. A wild-type strain outcompeted both hypo- and hyperaccumulating strains, suggesting that glycogen levels contribute substantially to the fitness of yeast.