p21-activated kinases (PAKs) are Cdc42 effectors found in metazoans, fungi and protozoa. They are subdivided into PAK1-like (group I) or PAK4-like (group II) kinases. Human PAK4 is widely expressed and its regulatory mechanism is unknown. We show that PAK4 is strongly inhibited by a newly identified auto-inhibitory domain (AID) formed by amino acids 20 to 68, which is evolutionarily related to that of other PAKs. In contrast to group I kinases, PAK4 is constitutively phosphorylated on Ser 474 in the activation loop, but held in an inactive state until Cdc42 binding. Thus, group II PAKs are regulated through conformational changes in the AID rather than A-loop phosphorylation.