C1 domains, the recognition motif of the second messenger diacylglycerol and of the phorbol esters, are classified as typical (ligand-responsive) or atypical (not ligand-responsive). The C1 domain of Vav1, a guanine nucleotide exchange factor, plays a critical role in regulation of Vav activity through stabilization of the Dbl homology domain, which is responsible for exchange activity of Vav. Although the C1 domain of Vav1 is classified as atypical, it retains a binding pocket geometry homologous to that of the typical C1 domains of PKCs. This study clarifies the basis for its failure to bind ligands. Substituting Vav1-specific residues into the C1b domain of PKCδ, we identified five crucial residues (Glu(9), Glu(10), Thr(11), Thr(24), and Tyr(26)) along the rim of the binding cleft that weaken binding potency in a cumulative fashion. Reciprocally, replacing these incompatible residues in the Vav1 C1 domain with the corresponding residues from PKCδ C1b (δC1b) conferred high potency for phorbol ester binding. Computer modeling predicts that these unique residues in Vav1 increase the hydrophilicity of the rim of the binding pocket, impairing membrane association and thereby preventing formation of the ternary C1-ligand-membrane binding complex. The initial design of diacylglycerol-lactones to exploit these Vav1 unique residues showed enhanced selectivity for C1 domains incorporating these residues, suggesting a strategy for the development of ligands targeting Vav1.