Atypical protein kinase C (aPKC) controls cell polarity by modulating substrate cortical localization. Aberrant aPKC activity disrupts polarity, yet the mechanisms that control aPKC remain poorly understood. We used a reconstituted system with purified components and a cultured cell cortical displacement assay to investigate aPKC regulation. We find that aPKC is autoinhibited by two domains within its NH(2)-terminal regulatory half, a pseudosubstrate motif that occupies the kinase active site, and a C1 domain that assists in this process. The Par complex member Par-6, previously thought to inhibit aPKC, is a potent activator of aPKC in our assays. Par-6 and aPKC interact via PB1 domain heterodimerization, and this interaction activates aPKC by displacing the pseudosubstrate, although full activity requires the Par-6 CRIB-PDZ domains. We propose that, along with its previously described roles in controlling aPKC localization, Par-6 allosterically activates aPKC to allow for high spatial and temporal control of substrate phosphorylation and polarization.