Mammary epithelial cells organize in three dimensions and generate acini when supported on laminin-rich extracellular matrix. Acinus formation begins with the apicobasal polarisation of the outer cells of the assembly and the withdrawal of these cells from the cell cycle. Internal cells then clear out to form a hollow lumen. Here, we show that PKCζ is phosphorylated (at T410) and activated in the early stages of acinus formation in both primary cells and MCF10A cells, and during mammary tree maturation in vivo. Phospho-PKCζ colocalised with tight junction components and bound to the Par polarising complex in developing acini. To further investigate the importance of PKCζ phosphorylation in this context, acinus formation was studied in MCF10A cells overexpressing non-phosphorylatable (T410A) or 'constitutively phosphorylated' (T410E) PKCζ. In both cell types, acinus-associated cell polarisation and lumen clearance were compromised, emphasising the importance of regulated phosphorylation of PKCζ at T410 for successful acinus formation. PKCζ can be activated in a phosphorylation (at T410)-dependent and a phosphorylation-independent manner. Cells overexpressing a complete kinase-deficient PKCζ (K281W) displayed a cell polarising deficit, but also generated large 'multi-acinar' structures with associated early lumenal cell hyperproliferation. Therefore our data shows, for the first time, that two separable PKCζ activities (one phosphorylation-dependent, the other not) are required to support the cell polarisation and proliferation restriction that underpins successful acinus formation. Paralleling these contributions, we found that low levels of PKCζ mRNA expression are associated with more 'poorly differentiated' tumours and a poor outcome in a cohort of 295 breast cancer patients.