Mutations in P0 (MPZ), the major myelin protein of the peripheral nervous system, cause the inherited demyelinating neuropathy Charcot-Marie-Tooth disease type 1B. P0 is a member of the immunoglobulin superfamily and functions as a homophilic adhesion molecule. We now show that point mutations in the cytoplasmic domain that modify a PKC target motif (RSTK) or an adjacent serine residue abolish P0 adhesion function and can cause peripheral neuropathy in humans. Consistent with these data, PKCα along with the PKC binding protein RACK1 are immunoprecipitated with wild-type P0, and inhibition of PKC activity abolishes P0-mediated adhesion. Point mutations in the RSTK target site that abolish adhesion do not alter the association of PKC with P0; however, deletion of a 14 amino acid region, which includes the RSTK motif, does abolish the association. Thus, the interaction of PKCα with the cytoplasmic domain of P0 is independent of specific target residues but is dependent on a nearby sequence. We conclude that PKC-mediated phosphorylation of specific residues within the cytoplasmic domain of P0 is necessary for P0-mediated adhesion, and alteration of this process can cause demyelinating neuropathy in humans.