Macrophage colony-stimulating factor (M-CSF or CSF-1) and its cognate receptor, the tyrosine kinase c-fms, are essential for monocyte and macrophage development. We have recently identified an Fms-interacting protein (FMIP) that binds transiently to the cytoplasmic domain of activated Fms molecules and is phosphorylated on tyrosine by Fms tyrosine kinase. FMIP is a substrate not only for Fms but also for protein kinase C (PKC). Mutagenesis reveals that this occurs on serines 5 and 6. Adjacent to these sites is a nuclear localization signal (NLS). We show that this NLS is essential for the predominantly nuclear localization of FMIP. Generation of phosphomimetic substitutions on serine residues 5 and 6 confirms that PKC-mediated phosphorylation on this site leads to translocation of FMIP to the cytosol. Furthermore, the mutant FMIP (FMIPSS5, 6AA) was detected abundantly in the nucleus even in the presence of activated PKCalpha. Wild-type FMIP and FMIPSS5, 6AA inhibited M-CSF-mediated survival signaling, while FMIPSS5, 6EE-expressing cells survived and differentiated into macrophages more efficiently than wild-type cells in the presence of M-CSF or TPA. We conclude M-CSF-mediated activation of PKCalpha can potentiate FMIP action to initiate survival/differentiation signaling.