Mature protein kinase C is phosphorylated at a conserved carboxyl-terminal motif that contains a Ser (or Thr) bracketed by two hydrophobic residues; in protein kinase C beta II, this residue is Ser-660 (Keranen, L. M., Dutil, E. M., and Newton, A. C. (1995) Curr. Biol. 5, 1394-1403), This contribution examines how negative charge at this position regulates the function of protein kinase C. Specifically, Ser-660 in protein kinase C beta II was mutated to Ala or Glu and the enzyme's stability, membrane interaction, Ca2+ regulation, and kinetic parameters were compared with those of wild-type protein phosphorylated at residue 660, Negative charge at this position had no significant effect on the enzyme's diacylglycerol-stimulated membrane interaction nor the conformational change accompanying membrane binding. In contrast, phosphate caused a 10-fold increase in the enzyme's affinity for Ca2+ and a comparable increase in its affinity for phosphatidylserine, two interactions that are mediated by the C2 domain, Negative charge also increased the protein's thermal stability and decreased its K-m, for ATP and peptide substrate. These data indicate that phosphorylation at the extreme carboxyl terminus of protein kinase C structures the active site so that it binds ATP and substrate with higher affinity and structures determinants in the regulatory region enabling higher affinity binding of Ca2+. The motif surrounding Ser-660 in protein kinase C beta II is found in a number of other kinases, suggesting interactions promoted by phosphorylation of the carboxyl terminus may provide a general mechanism for stabilizing kinase structure.