Protein kinase C-related protein kinases (PRKs) are effectors of the Rho family of small GTPases and play a role in the development of diseases such as prostate cancer and hepatitis C. Here we examined the mechanism underlying the regulation of PRK2 by its N-terminal region. We show that the N-terminal region of PRK2 prevents the interaction with its upstream kinase, the 3-phosphoinositide-dependent kinase 1 (PDK1), which phosphorylates the activation loop of PRK2. We confirm that the N-terminal region directly inhibits the kinase activity of PRK2. However, in contrast to previous models, our data indicate that this inhibition is mediated in trans through an intermolecular PRK2-PRK2 interaction. Our results also suggest that amino acids 487-501, located in the linker region between the N-terminal domains and the catalytic domain, contribute to the PRK2-PRK2 dimer formation. This dimerization is further supported by other N-terminal domains. Additionally, we provide evidence that the region C-terminal to the catalytic domain intramolecularly activates PRK2. Finally, we discovered that the catalytic domain mediates a cross-talk between the inhibitory N-terminal region and the activating C-terminal region. The results presented here describe a novel mechanism of regulation among AGC kinases and offer new insights into potential approaches to pharmacologically regulate PRK2.