We identified the multifunctional chaperon protein p32 as a protein kinase C (PKC)-binding protein interacting with PKCalpha, PKCzeta, PKCdelta, and PKC mu. We have analyzed the interaction of PKC mu with p32 in detail, and we show here in vivo association of PKC mu, as revealed from yeast two-hybrid analysis, precipitation assays using glutathione S-transferase fusion proteins, and reciprocal coimmunoprecipitation. In SKW 6.4 cells, PKC mu is constitutively associated with p32 at mitochondrial membranes, evident from colocalization with cytochrome c. p32 interacts with PKC mu in a compartment-specific manner, as it can be coimmunoprecipitated mainly from the particulate and not from the soluble fraction, despite the presence of p32 in both fractions. Although p32 binds to the kinase domain of PKC mu, it does not serve as a substrate. Interestingly, PKC mu-p32 immunocomplexes precipitated from the particulate fraction of two distinct cell lines, SKW 6.4 and 293T, show no detectable substrate phosphorylation. In support of a kinase regulatory function of p32, addition of p32 to in vitro kinase assays blocked, in a dose-dependent manner, aldolase but not autophosphorylation of PKC mu, suggesting a steric hindrance of substrate within the kinase domain. Together, these findings identify p32 as a novel, compartment-specific regulator of PKC mu kinase activity.