The C2 domain of protein kinase Calpha (PKCalpha) controls the translocation of this kinase from the cytoplasm to the plasma membrane during cytoplasmic Ca2+ signals. The present study uses intracellular coimaging of fluorescent fusion proteins and an in vitro FRET membrane-binding assay to further investigate the nature of this translocation. We find that Ca2+-activated PKCalpha and its isolated C2 domain localize exclusively to the plasma membrane in vivo and that a plasma membrane lipid, phosphatidylinositol-4,5-bisphosphate (PIP2), dramatically enhances the Ca2+-triggered binding of the C2 domain to membranes in vitro. Similarly, a hybrid construct substituting the PKCalpha Ca2+-binding loops (CBLs) and PIP2 binding site (beta-strands 3-4) into a different C2 domain exhibits native Ca2+-triggered targeting to plasma membrane and recognizes PIP2. Conversely, a hybrid containing the CBLs but lacking the PIP2 site translocates primarily to trans-Golgi network (TGN) and fails to recognize PIP2. Similarly, PKCalpha C2 domains possessing mutations in the PIP2 site target primarily to TGN and fail to recognize PIP2. Overall, these findings demonstrate that the CBLs are essential for Ca2+-triggered membrane binding but are not sufficient for specific plasma membrane targeting. Instead, targeting specificity is provided by basic residues on beta-strands 3-4, which bind to plasma membrane PIP2.