Phospholemman (PLM) regulates Na⁺/Ca²⁺ exchanger (NCX1) and Na⁺-K⁺-ATPase in cardiac myocytes. PLM, when phosphorylated at serine68, disinhibits Na⁺-K⁺-ATPase but inhibits NCX1. PLM regulates cardiac contractility by modulating Na⁺-K⁺-ATPase and/or NCX1. In this study, we first demonstrated that adult mouse cardiac myocytes cultured for 48 hours had normal surface membrane area, t-tubules, and NCX1 and sarcoplasmic reticulum Ca²⁺-ATPase levels, retained near normal contractility, but ₁-subunit of Na⁺-K⁺-ATPase was slightly decreased. Differences in contractility between myocytes isolated from wild-type (WT) and PLM knockout (KO) hearts were preserved after 48h of culture. Infection with adenovirus expressing green fluorescent protein (GFP) did not affect contractility at 48h. When WT PLM was overexpressed in PLM-KO myocytes, contractility and [Ca²⁺]_i transients reverted back to those observed in cultured WT myocytes. Both Na⁺-K⁺-ATPase current (I_pump) and Na⁺/Ca²⁺ exchange current (I_NaCa) in PLM-KO myocytes rescued with WT PLM was depressed when compared to PLM-KO myocytes. Overexpressing the PLMS68E mutant (phosphomimetic) in PLM-KO myocytes resulted in suppression of I_NaCa but no effect on I_pump. Contractility, [Ca²⁺]_i transient amplitudes and SR Ca²⁺ contents in PLM-KO myocytes overexpressing PLMS68E mutant were depressed when compared to PLM-KO mycoytes overexpressing GFP. By contrast, overexpressing the PLMS68A mutant (mimicking unphosphorylated PLM) in PLM-KO myocytes had no effects on I_NaCa but decreased I_pump. Contractility and [Ca²⁺]_i transient amplitudes and SR Ca²⁺ contents in PLM-KO myocytes overexpressing S68A mutant were similar to PLM-KO myocytes overexpressing GFP. We conclude that at the single myocyte level, PLM affects cardiac contractility and [Ca²⁺]_i homeostasis primarily by its direct inhibitory effects on Na⁺/^Ca2+ exchange.