Trypsinization of rat brain protein kinase C (80 kDa) into 50- and 32-kDa fragments occurred without inhibition of [3H]phorbol dibutyrate ([3H]PDBu) binding activity. The 50-kDa fragment, the catalytic domain (Inoue, M., Kishimoto, A., Takai, Y., and Nishizuka, Y. (1977) J. Biol. Chem. 252, 7610-7616), was further degraded by trypsin, whereas the 32-kDa fragment was resistant. Protein kinase activity and the [3H]PDBu binding activity were completely separated upon gel filtration of a solution containing Triton X-100/phosphatidylserine mixed micelles and trypsinized protein kinase C. Pooled fractions of the [3H]PDBu binding activity contained a 32-kDa fragment exclusively. The binding of [3H]PDBu to this fragment was dependent on calcium and phosphatidylserine and was of high affinity (Kd = 2.8 nM) and of essentially identical specificity to that of native protein kinase C. It is concluded that the 32-kDa fragment represents a lipid binding, regulatory domain of protein kinase C.