The mechanism by which PDK1 regulates AGC kinases remains unclear. To further understand this process, we performed a yeast two-hybrid screen using PDK1 as bait. PKC-zeta, PKC-delta, and PRK2 were identified as interactors of PDK1. A combination of yeast two-hybrid binding assays and coprecipitation from mammalian cells was used to characterize the nature of the PDK1-PKC interaction. The presence of the PH domain of PDK1 inhibited the interaction of PDK1 with the PKCs. A contact region of PDK1 was mapped between residues 314 and 408. The interaction of PDK1 with the PKCs required the full-length PKC-zeta and -delta proteins apart from their C-terminal tails. PDK1 was able to phosphorylate full-length PKC-zeta and -delta but not PKC-zeta and -delta constructs containing the PDK1 phosphorylation site but lacking the C-terminal tails. A C-terminal PRK2 fragment, normally produced by caspase-3 cleavage during apoptosis, inhibited PDK1 autophosphorylation by >90%. The ability of PDK1 to phosphorylate PKC-zeta and -delta in vitro was also markedly inhibited by the PRK2 fragment. Additionally, generation of the PRK2 fragment in vivo inhibited by >90% the phosphorylation of endogenous PKC-zeta by PDK1. In conclusion, these results show that the C-terminal tail of PKC is a critical determinant for PKC-zeta and -delta phosphorylation by PDK1. Moreover, the C-terminal PRK2 fragment acts as a potent negative regulator of PDK1 autophosphorylation and PDK1 kinase activity against PKC-zeta and -delta. As the C-terminal PRK2 fragment is naturally generated during apoptosis, this may provide a mechanism of restraining prosurvival signals during apoptosis.