Abnormal regulation of brain glycogen metabolism is believed to underlie insulin‐induced hypoglycaemia, which may be serious or fatal in diabetic patients on insulin therapy. A key regulator of glycogen levels is glycogen targeted protein phosphatase 1 (PP1), which dephosphorylates and activates glycogen synthase (GS) leading to an increase in glycogen synthesis. In this study, we show that the gene PPP1R3F expresses a glycogen‐binding protein (R3F) of 82.8 kDa, present at the high levels in rodent brain. R3F binds to PP1 through a classical ‘RVxF’ binding motif and substitution of Phe39 for Ala in this motif abrogates PP1 binding. A hydrophobic domain at the carboxy‐terminus of R3F has similarities to the putative membrane binding domain near the carboxy‐terminus of striated muscle glycogen targeting subunit GM/RGL, and R3F is shown to bind not only to glycogen but also to membranes. GS interacts with PP1‐R3F and is hyperphosphorylated at glycogen synthase kinase‐3 sites (Ser640 and Ser644) when bound to R3F(Phe39Ala). Deprivation of glucose or stimulation with adenosine or noradrenaline leads to an increased phosphorylation of PP1‐R3F bound GS at Ser640 and Ser644 curtailing glycogen synthesis and facilitating glycogen degradation to provide glucose in astrocytoma cells. Adenosine stimulation also modulates phosphorylation of R3F at Ser14/Ser18.