DOC-2/DAB2, a novel phosphoprotein with signal-transducing capability, inhibits human prostatic cancer cells (Tseng, C.-P., Ely, B. D., Li, Y., Pong, R.-C., and Hsieh, J.-T. (1998) Endocrinology 139, 3542-3553). However, its mechanism of action is not understood completely. This study delineates the functional significance of DOC-2/DAB2 protein phosphorylation and demonstrates that in vivo activation of protein kinase C (PKC) by 12-O-tetradecanoylphorbol-13-acetate (TPA) induces DOC-2/DAB2 phosphorylation, including a serine residue at position 24. Mutation of Ser(24) to Ala reduced DOC-2/DAB2 phosphorylation by PKC. Using a synthetic Ser(24) peptide (APS(24)KKEKKKGSEKTD) or recombinant DOC-2/DAB2 as substrates, PKCbetaII, PKCgamma, and PKCdelta (but not casein kinase II) directly phosphorylated Ser(24) in vitro. This indicates that DOC-2/DAB2 is a PKC-specific substrate. Since expression of wild-type DOC-2/DAB2, but not the S24A mutant, inhibited TPA-induced AP-1 activity in prostatic epithelial cells, phosphorylation of Ser(24) appears to play a critical role in modulating TPA-induced AP-1 activity. Taken together, these data suggest that PKC-regulated phosphorylation of DOC-2/DAB2 protein may help its growth inhibitory function.