Several novel protein kinase C (PKC) isozymes have been identified as substrates for caspase-3. We have previously shown that novel PKCε is cleaved during apoptosis in MCF-7 cells that lack any functional caspase-3. In the present study, we show that in vitro-translated PKCε is processed by human recombinant caspase-3, -7, and -9. Tumor necrosis factor-α (TNF) triggered processing of PKCε to a 43-kDa carboxyl-terminal fragment, and cell-permeable caspase inhibitors prevented TNF-induced processing of PKCε in MCF-7 cells. PKCε was cleaved primarily at the SSPD ↓ G site to generate two fragments with an approximate molecular mass of 43 kDa. It was also cleaved at the DDVD ↓ C site to generate two fragments with molecular masses of 52 and 35 kDa. Treatment of MCF-7 cells with TNF resulted in the activation of PKCε, and mutation at the SSPD ↓ G (D383A) site inhibited proteolytic activation of PKCε. Over-expression of wild-type but not dominant-negative PKCε in MCF-7 cells delayed TNF-induced apoptosis, and mutation at the D383A site prevented antiapoptotic activity of PKCε. These results suggest that cleavage of PKCε by caspase-7 at the SSPD ↓ G site results in the activation of PKCε. Furthermore, activation of PKCε was associated with its antiapoptotic function.