An increasing number of independent studies indicate that the atypical protein kinase C (PKC) isoforms (aPKCs) are critically involved in the control of cell proliferation and survival. The aPKCs are targets of important lipid mediators such as ceramide and the products of the PI 3-kinase. In addition, the aPKCs have been shown to interact with Ras and with two novel proteins, LIP (lambda-interacting protein; a selective activator of λ/ιPKC) and the product ofpar-4 (a gene induced during apoptosis), which is an inhibitor of both λ/ιPKC and ζPKC. LIP and Par-4 interact with the zinc finger domain of the aPKCs where the lipid mediators have been shown to bind. Here we report the identification of p62, a previously described phosphotyrosine-independent p56^lckSH2-interacting protein, as a molecule that interacts potently with the V1 domain of λ/ιPKC and, albeit with lower affinity, with ζPKC. We also show in this study that ectopically expressed p62 colocalizes perfectly with both λ/ιPKC and ζPKC. Interestingly, the endogenous p62, like the ectopically expressed protein, displays a punctate vesicular pattern and clearly colocalizes with endogenous λ/ιPKC and endogenous ζPKC. P62 colocalizes with Rab7 and partially with lamp-1 and limp-II as well as with the epidermal growth factor (EGF) receptor in activated cells, but not with Rab5 or the transferrin receptor. Of functional relevance, expression of dominant negative λ/ιPKC, but not of the wild-type enzyme, severely impairs the endocytic membrane transport of the EGF receptor with no effect on the transferrin receptor. These findings strongly suggest that the aPKCs are anchored by p62 in the lysosome-targeted endosomal compartment, which seems critical for the control of the growth factor receptor trafficking. This is particularly relevant in light of the role played by the aPKCs in mitogenic cell signaling events.