PKClambda/iota belongs to the third group of the PKC family, atypical PKC (aPKC), together with PKCzeta based on its sequence divergence from conventional and novel PKCs observed not only in the N-terminal regulatory domain but also in the kinase domain. Although one of the most distinct features of aPKC is its single, unrepeated cysteine-rich domain, recent studies have revealed that the N-terminal regulatory domain has additional aPKC-specific structural motifs involved in various protein-protein interactions, which are important for the regulation and the subcellular targeting of aPKC. The identification of aPKC-specific binding proteins has significantly facilitated our understanding of the activation mechanism as well as the physiological function of aPKC at the molecular level. In particular, the finding that the mammalian homologs of the Caenorhabditis elegans proteins, PAR-3 and PAR-6, bind aPKC unexpectedly opens a new avenue for exploring a thus far completely unrecognized critical function of aPKC, that is, as a component of an evolutionarily conserved cell polarity machinery. Together with the great progress in the genome project as well as in the genetic analysis of model organisms, these advances are leading us into the new era of aPKC study in which functional divergence between PKClambda/iota and zeta can be discussed in elaborately.