Atypical protein kinase C (aPKC) enzymes signal on protein scaffolds, yet how they are maintained in an active conformation on scaffolds is unclear. A myristoylated peptide based on the autoinhibitory pseudosubstrate fragment of the atypical PKCζ, zeta inhibitory peptide (ZIP), has been extensively used to inhibit aPKC activity; however, we have previously shown that ZIP does not inhibit the catalytic activity of aPKC isozymes in cells (Wu-Zhang, A. X., Schramm, C. L., Nabavi, S., Malinow, R., and Newton, A. C. (2012) J. Biol. Chem. 287, 12879-12885). Here we sought to identify a bona fide target of ZIP and, in so doing, unveiled a novel mechanism by which aPKCs are maintained in an active conformation on a protein scaffold. Specifically, we used protein-protein interaction network analysis, structural modeling, and protein-protein docking to predict that ZIP binds an acidic surface on the Phox and Bem1 (PB1) domain of p62, an interaction validated by peptide array analysis. Using a genetically encoded reporter for PKC activity fused to the p62 scaffold, we show that ZIP inhibits the activity of wild-type aPKC, but not a construct lacking the pseudosubstrate. These data support a model in which the pseudosubstrate of aPKCs is tethered to the acidic surface on p62, locking aPKC in an open, signaling-competent conformation. ZIP competes for binding to the acidic surface, resulting in displacement of the pseudosubstrate of aPKC and re-engagement in the substrate-binding cavity. This study not only identifies a cellular target for ZIP, but also unveils a novel mechanism by which scaffolded aPKC is maintained in an active conformation.