Cardiolipin- or protease-activated protein kinase, isolated from rat liver cytosol and originally named liver PAK-1, was found to be the natural form of protein kinase N (PKN) by comparing the sequences of 43 tryptic peptides of the purified liver enzyme and determining the corresponding liver cDNA sequence. These analyses also identified (i) Arg-546 as the major site of proteolytic activation, (ii) the protease resistance of the C-terminal extension beyond the catalytic domain, and (iii) in vivo stoichiometric phosphorylation of Thr-778 in the mature enzyme. Homology modeling of the catalytic domain indicated that phosphothreonine 778 functions as an anchoring site similar to Thr-197 in cAMP-dependent protein kinase, which stabilizes an active site compatible with preferred substrate sequences of PAK-1/PKN. Sigmoidal autophosphorylation kinetics and increased S6-(229-239) peptide kinase activity following preincubation with ATP suggested phosphorylation-dependent activation of PAK-1/PKN. The onset of activation corresponded with phosphorylation of the regulatory domain site Ser-377 (located within a spectrin homology region), followed by Thr-504 (within a limited protein kinase C homology region), and, to a lesser extent, Thr-64 (in the RhoA-binding region). Several additional sites in the hinge region adjacent to a PEST protein degradation signal were selectively autophosphorylated following cardiolipin activation. Overall, these observations suggest that the regulation of this class of protein kinase involves complex interactions among phosphorylation-, lipid-, and other ligand-dependent activation events.