Edited by Henrik DohlmanThe proper establishment of epithelial polarity allows cells to sense and respond to signals that arise from the microenvironment in a spatiotemporally controlled manner. Atypical PKCs (aPKCs) are implicated as key regulators of epithelial polarity. However, the molecular mechanism underlying the negative regulation of aPKCs remains largely unknown. In this study, we demonstrated that PH domain leucine-rich repeat protein phosphatase (PHLPP), a novel family of Ser/Thr protein phosphatases, plays an important role in regulating epithelial polarity by controlling the phosphorylation of both aPKC isoforms. Altered expression of PHLPP1 or PHLPP2 disrupted polarization of Caco2 cells grown in 3D cell cultures as indicated by the formation of aberrant multi-lumen structures. Overexpression of PHLPP resulted in a decrease in aPKC phosphorylation at both the activation loop and the turn motif sites; conversely, knockdown of PHLPP increased aPKC phosphorylation. Moreover, in vitro dephosphorylation experiments revealed that both aPKC isoforms were substrates of PHLPP. Interestingly, knockdown of PKC, but not PKC, led to similar disruption of the polarized lumen structure, suggesting that PKC likely controls the polarization process of Caco2 cells. Furthermore, knockdown of PHLPP altered the apical membrane localization of aPKCs and reduced the formation of aPKC-Par3 complex. Taken together, our results identify a novel role of PHLPP in regulating aPKC and cell polarity.Establishing the polarity of epithelial cells is crucial for the maintenance of tissue homeostasis. Increasing evidence has suggested that disruption of polarity promotes the malignant progression of cancer cells. It has been well documented that epithelial cells (including those in the gastrointestinal tract) become polarized during the differentiation process (1). The polarization process is characterized by the formation of specialized junctions between neighboring cells and subsequent separation of two plasma membrane domains: the apical surface facing the external medium and the basolateral surface connected to adjacent cells and extracellular matrix (2). The apical and basolateral membranes are segregated by two highly organized junctions, the tight and adherens junctions, assembled at the site of mammalian cell-cell contacts (3-5). As a major component of the Par complex, aPKCs 2 including PKC and PKC, are known to phosphorylate a number of polarity proteins, including Par3, LgL, Crumbs, and Lin5/NuMA, thereby exerting its regulatory roles in cellular polarization (6). Previous studies have suggested that a precise control of aPKC activity is required for the proper establishment of epithelial cell-cell junction and cell polarity (7,8). Loss of polarity has been associated with increased cell migration and metastasis during tumor progression (1, 9).Differing from conventional and novel PKCs, aPKCs are insensitive to diacylglycerol-and Ca 2ϩ -mediated activation due to the lack of functional C1 and C2 domains (10). As a result...