Atypical protein kinase C-iota (aPKCiota) plays an important role in mitogenic signaling, actin cytoskeleton organization, and cell survival. Apart from the differences in the regulatory domain, the catalytic domain of aPKCiota differs considerably from other known kinases, because it contains a modification within the glycine-rich loop motif (GXGXXG) that is found in the nucleotide-binding fold of virtually all nucleotide-binding proteins including PKCs, Ras, adenylate kinase, and the mitochondrial F1-ATPase. We have used site-directed mutagenesis and kinetic analysis to investigate whether these sequence differences affect the nucleotide binding properties and catalytic activity of aPKCiota. When lysine 274, a residue essential for ATP binding and activity conserved in most protein kinases, was replaced by arginine (K274R mutant), aPKCiota retained its normal kinase activity. This is in sharp contrast to results published for any other PKC or even distantly related kinases like phosphoinositide 3-kinase gamma, where the same mutation completely abrogated the kinase activity. Furthermore, the sensitivity of aPKCiota for inhibition by GF109203X, a substance acting on the ATP-binding site, was not altered in the K274R mutant. In contrast, replacement of Lys-274 by tryptophan (K274W) completely abolished the kinase activity of PKCiota. In accordance with results obtained with other kinase-defective PKC mutants, in cultured cells aPKCiota-K274W acted in a dominant negative fashion on signal transduction pathways involving endogenous aPKCiota, whereas the effect of the catalytically active K274R mutant was identical to the wild type enzyme. In summary, aPKCiota differs from classical and novel PKCs also in the catalytic domain. This information could be of significant value for the development of specific inhibitors of aPKCiota as a key factor in central signaling pathways.