The conventional protein kinase C isoform, PKCII, is a signaling kinase activated during the hyperglycemic state and has been associated with the development of microvascular abnormalities associated with diabetes. PKCII, therefore, has been identified as a therapeutic target where inhibitors of its kinase activity are being pursued for treatment of microvascular-related diabetic complications. In this report, we describe the crystal structure of the catalytic domain of PKCbetaII complexed with an inhibitor at 2.6 A resolution. The kinase domain of PKCbetaII was cleaved and purified from full-length PKCbetaII expressed in baculovirus-infected insect cells. The overall kinase domain structure follows the classical bilobal fold and is in its fully activated conformation with three well-defined phosphorylated residues: Thr-500, Thr-641, and Ser-660. Different from the crystal structures of nonconventional PKC isoforms, the C-terminus of the PKCbetaII catalytic domain is almost fully ordered and features a novel alpha helix in the turn motif. An ATP-competitive inhibitor, 2-methyl-1H-indol-3-yl-BIM-1, was crystallized with the PKCbetaII catalytic domain as a dimer of two enzyme-inhibitor complexes. The bound inhibitor adopts a nonplanar conformation in the ATP-binding site, with the kinase domain taking on an intermediate, open conformation. This PKCbetaII-inhibitor complex represents the first structural description of any conventional PKC kinase domain. Given the pathogenic role of PKCbetaII in the development of diabetic complications, this structure can serve as a template for the rational design of inhibitors as potential therapeutic agents.