Protein kinase C (PKC) plays a central role in the control of proliferation and differentiation of a wide range of cell types by mediating the signal transduction response to hormones and growth factors. Upon activation by diacylglycerol, PKC translocates to different subcellular sites where it phosphorylates numerous proteins, most of which are unidentified. We used the yeast two-hybrid system to identify proteins that interact with activated PKC alpha. Using the catalytic region of PKC fused to the DNA binding domain of yeast GAL4 as "bait" to screen a mouse T cell cDNA library in which cDNA was fused to the GAL4 activation domain, we cloned several novel proteins that interact with C-kinase (PICKs). One of these proteins, designated PICK1, interacts specifically with the catalytic domain of PKC and is an efficient substrate for phosphorylation by PKC in vitro and in vivo. PICK1 is localized to the perinuclear region and is phosphorylated in response to PKC activation. PICK1 and other PICKs may play important roles in mediating the actions of PKC.