Recent studies have demonstrated that the cytoplasmic tail of syndecan-4, a widely expressed transmembrane proteoglycan, can activate protein kinase Calpha in vitro, in combination with phosphatidylinositol-4,5-bisphosphate (PI-4,5-P(2)). Syndecan-4 is involved in growth factor binding as well as in adhesion to extracellular matrix proteins, while PI-4,5-P(2) synthesis is modulated by growth factor and adhesion-generated signaling. The cooperative activation of PKCalpha by the proteoglycan and the phosphatidylinositol may constitute, therefore, an essential part of the cell's response to these extracellular signals. To characterize the activation mechanism of PKCalpha, we addressed here the nature of the interplay between syndecan-4, PI-4,5-P(2), and PKCalpha by measuring their mutual binding affinities and the specificity of their interactions. We found that the cytoplasmic tail of syndecan-4 is unlikely to bind directly to PKCalpha, and that this interaction critically depends on PI-4,5-P(2). The PI-4,5-P(2) specificity of the activation of PKCalpha is conferred by the cytoplasmic tail of syndecan-4, which has higher binding affinity for this phosphatidylinositol over phosphatidylinositol-3,4-bisphosphate and the -3,4,5-trisphospate. The activation is specific to PKCalpha and does not encompass the novel protein kinase C delta isoenzyme.