We here describe the structural requirements for Golgi localization and a sequential, localization-dependent activation process of protein kinase C (PKC) mu involving auto- and transphosphorylation. The structural basis for Golgi compartment localization was analyzed by confocal microscopy of HeLa cells expressing various PKC mu-green fluorescent protein fusion proteins costained with the Golgi compartment-specific markers p24 and p230. Deletions of either the NH(2)-terminal hydrophobic or the cysteine region, but not of the pleckstrin homology or the acidic domain, of PKC mu completely abrogated Golgi localization of PKC mu. As an NH(2)-terminal PKC mu fragment was colocalized with p24, this region of PKC mu is essential and sufficient to mediate association with Golgi membranes. Fluorescence recovery after photobleaching studies confirmed the constitutive, rapid recruitment of cytosolic PKC mu to, and stable association with, the Golgi compartment independent of activation loop phosphorylation. Kinase activity is not required for Golgi complex targeting, as evident from microscopical and cell fractionation studies with kinase-dead PKC mu found to be exclusively located at intracellular membranes. We propose a sequential activation process of PKC mu, in which Golgi compartment recruitment precedes and is essential for activation loop phosphorylation (serines 738/742) by a transacting kinase, followed by auto- and transphosphorylation of NH(2)-terminal serine(s) in the regulatory domain. PKC mu activation loop phosphorylation is indispensable for substrate phosphorylation and thus PKC mu function at the Golgi compartment.