The C2 domain is a Ca(2+)-dependent membrane-targeting module found in many cellular proteins involved in signal transduction or membrane trafficking. C2 domains are unique among membrane targeting domains in that they show a wide range of lipid selectivity for the major components of cell membranes, including phosphatidylserine and phosphatidylcholine. To understand how C2 domains show diverse lipid selectivity and how this functional diversity affects their subcellular targeting behaviors, we measured the binding of the C2 domains of group IVa cytosolic phospholipase A(2) (cPLA(2)) and protein kinase C-alpha (PKC-alpha) to vesicles that model cell membranes they are targeted to, and we monitored their subcellular targeting in living cells. The surface plasmon resonance analysis indicates that the PKC-alpha C2 domain strongly prefers the cytoplasmic plasma membrane mimic to the nuclear membrane mimic due to high phosphatidylserine content in the former and that Asn(189) plays a key role in this specificity. In contrast, the cPLA(2) C2 domain has specificity for the nuclear membrane mimic over the cytoplasmic plasma membrane mimic due to high phosphatidylcholine content in the former and aromatic and hydrophobic residues in the calcium binding loops of the cPLA(2) C2 domain are important for its lipid specificity. The subcellular localization of enhanced green fluorescent protein-tagged C2 domains and mutants transfected into HEK293 cells showed that the subcellular localization of the C2 domains is consistent with their lipid specificity and could be tailored by altering their in vitro lipid specificity. The relative cell membrane translocation rate of selected C2 domains was also consistent with their relative affinity for model membranes. Together, these results suggest that biophysical principles that govern the in vitro membrane binding of C2 domains can account for most of their subcellular targeting properties.