PRK1 is a lipid- and Rho GTPase-activated serine/threonine protein kinase implicated in the regulation of receptor trafficking, cytoskeletal dynamics and tumorigenesis. Although Rho binding has been mapped to the HR1 region in the regulatory domain of PRK1, the mechanism involved in the control of PRK1 activation following Rho binding is poorly understood. We now provide the first evidence that the very C-terminus beyond the hydrophobic motif in PRK1 is essential for the activation of this kinase by RhoA. Deletion of the HR1 region did not completely abolish the binding of PRK1-DeltaHR1 to GTPgammaS-RhoA nor the activation of this mutant by GTPgammaS-RhoA in vitro. In contrast, removing of the last six amino acid residues from the C-terminus of PRK1 or truncating of a single C-terminal residue from PRK1-DeltaHR1 completely abrogated the activation of these mutants by RhoA both in vitro and in vivo. The critical dependence of the very C-terminus of PRK1 on the signaling downstream of RhoA was further demonstrated by the failure of the PRK1 mutant lacking its six C-terminal residues to augment lisophosphatidic acid-elicited neurite retraction in neuronal cells. Thus, we show that the HR1 region is necessary but not sufficient in eliciting a full activation of PRK1 upon binding of RhoA. Instead, such activation is controlled by the very C-terminus of PRK1. Our results also suggest that the very C-terminus of PRK1, which is the least conserved among members of the protein kinase C superfamily, is a potential drug target for pharmacological intervention of RhoA-mediated signaling pathways.