Regulation of mast cell degranulation is dependent on the subtle interplay of cellular signaling proteins. The Src homology 2 (SH2) domain-containing inositol-5'-phosphatase (SHIP), which acts as the gatekeeper of degranulation, binds via both its SH2 domain and its phosphorylated NPXY motifs to the adapter protein Shc via the latter's phosphorylated tyrosines and phosphotyrosine-binding domain, respectively. This theoretically leaves Shc's SH2 domain available to bind proteins, which might be part of the SHIP/Shc complex. In a search for such proteins, protein kinase C-delta (PKC-delta) was found to coprecipitate in mast cells with Shc and to interact with Shc's SH2 domain following antigen or pervanadate stimulation. Phosphorylation of PKC-delta's Y(332), most likely by Lyn, was found to be responsible for PKC-delta's binding to Shc's SH2 domain. Using PKC-delta(-/-) bone marrow-derived mast cells (BMMCs), we found that the antigen-induced tyrosine phosphorylation of Shc was similar to that in wild-type (WT) BMMCs while that of SHIP was significantly increased. Moreover, increased translocation of PKC-delta to the membrane, as well as phosphorylation at T505, was observed in SHIP(-/-) BMMCs, demonstrating that while PKC-delta regulates SHIP phosphorylation, SHIP regulates PKC-delta localization and activation. Interestingly, stimulation of PKC-delta(-/-) BMMCs with suboptimal doses of antigen yielded a more sustained calcium mobilization and a significantly higher level of degranulation than that of WT cells. Altogether, our data suggest that PKC-delta is a negative regulator of antigen-induced mast cell degranulation.