The segment C-terminal to the hydrophobic motif at the V5 domain of protein kinase C (PKC) is the least conserved both in length and in amino acid identity among all PKC isozymes. By generating serial truncation mutants followed by biochemical and functional analyses, we show here that the very C terminus of PKCalpha is critical in conferring the full catalytic competence to the kinase and for transducing signals in cells. Deletion of one C-terminal amino acid residue caused the loss of approximately 60% of the catalytic activity of the mutant PKCalpha, whereas deletion of 10 C-terminal amino acid residues abrogated the catalytic activity of PKCalpha in immune complex kinase assays. The PKCalpha C-terminal truncation mutants were found to lose their ability to activate mitogen-activated protein kinase, to rescue apoptosis induced by the inhibition of endogenous PKC in COS cells, and to augment melatonin-stimulated neurite outgrowth. Furthermore, molecular dynamics simulations revealed that the deletion of 1 or 10 C-terminal residues results in the deformation of the V5 domain and the ATP-binding pocket, respectively. Finally, PKCalpha immunoprecipitated using an antibody against its C terminus had only marginal catalytic activity compared with that of the PKCalpha immunoprecipitated by an antibody against its N terminus. Therefore, the very C-terminal tail of PKCalpha is a novel determinant of the catalytic activity of PKC and a promising target for selective modulation of PKCalpha function. Molecules that bind preferentially to the very C terminus of distinct PKC isozymes and suppress their catalytic activity may constitute a new class of selective inhibitors of PKC.