Here we report on a lipid-signalling pathway in plants that is downstream of phosphatidic acid and involves the Arabidopsis protein kinase, AGC2-1, regulated by the 3'-phosphoinositide-dependent kinase-1 (AtPDK1). AGC2-1 specifically interacts with AtPDK1 through a conserved C-terminal hydrophobic motif that leads to its phosphorylation and activation, whereas inhibition of AtPDK1 expression by RNA interference abolishes AGC2-1 activity. Phosphatidic acid specifically binds to AtPDK1 and stimulates AGC2-1 in an AtPDK1-dependent manner. AtPDK1 is ubiquitously expressed in all plant tissues, whereas expression of AGC2-1 is abundant in fast-growing organs and dividing cells, and activated during re-entry of cells into the cell cycle after sugar starvation-induced G1-phase arrest. Plant hormones, auxin and cytokinin, synergistically activate the AtPDK1-regulated AGC2-1 kinase, indicative of a role in growth and cell division. Cellular localisation of GFP-AGC2-1 fusion protein is highly dynamic in root hairs and at some stages confined to root hair tips and to nuclei. The agc2-1 knockout mutation results in a reduction of root hair length, suggesting a role for AGC2-1 in root hair growth and development.