The yeast AGC kinase orthologs Ypk1 and Ypk2 control several important cellular processes, including actin polarization, endocytosis, and sphingolipid metabolism. Activation of Ypk1/2 requires phosphorylation by kinases localized at the plasma membrane (PM), including the 3-phosphoinositide-dependent kinase 1 orthologs Pkh1/Pkh2 and the target of rapamycin complex 2 (TORC2). Unlike their mammalian counterparts SGK and Akt, Ypk1 and Ypk2 lack an identifiable lipid-targeting motif; therefore, how these proteins are recruited to the PM has remained elusive. To explore Ypk1/2 function, we constructed ATP analog-sensitive alleles of both kinases and monitored global changes in gene expression following their inhibition, where we observed increased expression of stress-responsive target genes controlled by Ca(2+)-dependent phosphatase calcineurin. TORC2 has been shown previously to negatively regulate calcineurin in part by phosphorylating two related proteins, Slm1 and Slm2, which associate with the PM via plextrin homology domains. We therefore investigated the relationship between Slm1 and Ypk1 and discovered that these proteins interact physically and that Slm1 recruits Ypk1 to the PM for phosphorylation by TORC2. We observed further that these steps facilitate subsequent phosphorylation of Ypk1 by Pkh1/2. Remarkably, a requirement for Slm1, can be bypassed by fusing the plextrin homology domain of Slm1 alone onto Ypk1, demonstrating that the essential function of Slm1 is largely attributable to its role in Ypk1 activation. These findings both extend the scope of cellular processes regulated by Ypk1/2 to include negative regulation of calcineurin and broaden the repertoire of mechanisms for membrane recruitment and activation of a protein kinase.