We have previously shown that the activity of the interleukin-1 (IL-1) receptor-associated kinase (IRAK) is required for nerve growth factor (NGF)-induced activation of NF-kappaB and cell survival ((2002) J. Biol. Chem. 277, 28010-28018). Herein we demonstrate that NGF induces co-association of IRAK with atypical protein kinase C iota (PKC) and that the iota PKC.IRAK complex is recruited to the p75 neurotrophin receptor. Recruitment of IRAK to the receptor was dependent upon the activity of the iota PKC. Moreover, transfection of kinase-dead iota PKC blocked both NGF- and IL-1-induced IRAK activation and the activity of NF-kappaB. Hence, iota PKC lies upstream of IRAK in the kappaB pathway. Examining the primary structure of IRAK, we identified three putative PKC phosphorylation sites; iota PKC selectively phosphorylated peptide 1 (R (T) under bar AS) within the death domain domain at Thr(66), which is highly conserved among all IRAK family members. Mutation of Thr(66) to Ala impaired the autokinase activity of IRAK and reduced its association with iota PKC but not TRAM resulting in impaired NGF- as well as IL-1-induced NF-kappaB activation. These findings provide insight into the underlying mechanism whereby IRAK regulates the kappaB pathway and reveal that IRAK is a substrate of iota PKC.