Muscarinic agonists induce the activation of the airway smooth muscle (ASM) leading to smooth muscle contraction, important in asthma. This activation is mediated through M2/M3 muscarinic acetylcholine receptors (mAChRs). Muscarinic receptor activity, expressed as [3H]QNB binding at plasma membranes from bovine tracheal smooth muscle (BTSM), increased with cGMP and was augmented significantly cGMP plus ATP but diminished with the PKG-II inhibitor, Sp-8-pCPT-cGMPS. The [3H]-QNB binding was accelerated by okadaic acid, (OKA), a protein phosphatase (PPase) inhibitor. These two results indicated the involvement of a membrane-bound PPase. Moreover, a cGMP-dependent-[32P]gATP phosphorylation of plasma membranes from BTSM was stimulated at low concentrations of muscarinic agonist carbamylcholine (CC). However, higher amounts of CC produced a significant decrement of [32P]-labeling. A selective M3mAChR antagonist, 4-DAMP produced a dramatic inhibition of the basal and CC-dependent [32P]-labeling. The [32P] labeled membrane sediments were detergent solubilized and immunoprecipitated with specific M2/M3mAChR antibodies. The M3mAChR immuno-precipitates exhibited the highest cGMP-dependent [32P]-labeling, indicating it is a PKG-II substrate. Experiments using synthetic peptides from the C-terminal of the third intracellular loop (i3) of both M2mAChR (356–369) and M3mAChR (480–493) as external PKG-II substrates resulted in the i3M3-peptide being heavily phosphorylated. These results indicated that PKG-II phosphorylated the M3mAChR at the i3M3 domain (480MSLIKEKK485), suggesting that Ser481 may be the target. Finally, this phosphorylation site seems to be regulated by a membrane-bound PPase linked to muscarinic receptor. These findings are important to understand the role of M3mAChR in the patho-physiology of ASM involved in asthma and COPD.