To investigate the function of protein kinase C (PKC)-delta, we mutated its ATP binding site by converting the invariant lysine in the catalytic domain (amino acid 376) to an arginine, Expression vectors containing wild type and mutant PKC-delta cDNAs were generated either with or without an influenza virus hemagglutinin epitope tag. After expression in 32D cells by transfection, the PRC-delta ATP binding mutant (PKC-delta K376R) was not able to phosphorylate itself or the PKC-delta pseudosubstrate region derived substrate, indicating that PKC-delta R376R was an inactive enzyme, PKC activity was inhibited by 67% in 32D cells coexpressing both PKC-delta wild type (PKC-delta WT) and PKC-delta R376R when compared to 32D cells expressing only PKC-delta WT, Mixture of PKC-delta WT and PKC-delta K376R kinase sources in vitro also reduced the enzymatic activity of PKC-delta WT. These results suggest that PKC-delta K376R competes with PRC-delta WT and inhibits PKC-delta WT phosphorylation of its in vitro substrate. While PKC-delta WT overexpressed in 32D cells demonstrated 12-O-tetradecanoylphorbol-13-acetate (TPA)-dependent translocation from the cytosolic to the membrane fraction, PKC-delta K376R was exclusively localized in the membrane fraction even prior to TPA stimulation. Unlike PKC-delta WT which was phosphorylated on tyrosine residue(s) only after TPA treatment, PKC-delta K376R was constitutively phosphorylated on tyrosine residue(s). Although exposure of PKC-delta WT transfectants to TPA induced 32D monocytic differentiation, the 32D/PKC-delta K376R transfectants were resistant to TPA-induced differentiation. Thus, expression of active PRC-delta is required to mediate 32D monocytic differentiation in response to TPA stimulation.