Mature protein kinase C is phosphorylated at a conserved carboxyl-terminal motif that contains a Ser (or Thr) bracketed by two hydrophobic residues; in protein kinase C betaII, this residue is Ser-660 (Keranen, L. M., Dutil, E. M., and Newton, A. C. (1995) Curr. Biol. 5, 1394-1403). This contribution examines how negative charge at this position regulates the function of protein kinase C. Specifically, Ser-660 in protein kinase C betaII was mutated to Ala or Glu and the enzyme's stability, membrane interaction, Ca2+ regulation, and kinetic parameters were compared with those of wild-type protein phosphorylated at residue 660. Negative charge at this position had no significant effect on the enzyme's diacylglycerol-stimulated membrane interaction nor the conformational change accompanying membrane binding. In contrast, phosphate caused a 10-fold increase in the enzyme's affinity for Ca2+ and a comparable increase in its affinity for phosphatidylserine, two interactions that are mediated by the C2 domain. Negative charge also increased the protein's thermal stability and decreased its Km for ATP and peptide substrate. These data indicate that phosphorylation at the extreme carboxyl terminus of protein kinase C structures the active site so that it binds ATP and substrate with higher affinity and structures determinants in the regulatory region enabling higher affinity binding of Ca2+. The motif surrounding Ser-660 in protein kinase C betaII is found in a number of other kinases, suggesting interactions promoted by phosphorylation of the carboxyl terminus may provide a general mechanism for stabilizing kinase structure.