Protein kinase C (PKC) isozymes undergo down-regulation upon sustained stimulation. Previous studies have pointed to the existence of both proteasome-dependent and -independent pathways of PKCα processing. Here we demonstrate that these down-regulation pathways are engaged in different subcellular compartments; proteasomal degradation occurs mainly at the plasma membrane, whereas non-proteasomal processing occurs in the perinuclear region. Using cholesterol depletion, pharmacological inhibitors, RNA interference, and dominant-negative mutants, we define the mechanisms involved in perinuclear accumulation of PKCα and identify the non-proteasomal mechanism mediating its degradation. We show that intracellular accumulation of PKCα involves at least two clathrin-independent, cholesterol/lipid raft-mediated pathways that do not require ubiquitination of the protein; one is dynamin-dependent and likely involves caveolae, whereas the other is dynamin- and small GTPase-independent. Internalized PKCα traffics through endosomes and is delivered to the lysosome for degradation. Supportive evidence includes (a) detection of the enzyme in EEA1-positive early endosomes, Rab7-positive late endosomes/multivesicular bodies, and LAMP1-positive lysosomes and (b) inhibition of its down-regulation by lysosome-disrupting agents and leupeptin. Only limited dephosphorylation of PKCα occurs during trafficking, with fully mature enzyme being the main target for lysosomal degradation. These studies define a novel and widespread mechanism of desensitization of PKCα signaling that involves endocytic trafficking and lysosome-mediated degradation of the mature, fully phosphorylated protein.