Atypical protein kinase C (aPKC) isozymes are unique in the PKC superfamily in that they are not regulated by the lipid second messenger diacylglycerol, which has led to speculation about whether a different second messenger acutely controls their function. Here, using a genetically encoded reporter that we designed, aPKC-specific C kinase activity reporter (aCKAR), we found that the lipid mediator sphingosine 1-phosphate (S1P) promoted the cellular activity of aPKC. Intracellular S1P directly bound to the purified kinase domain of aPKC and relieved autoinhibitory constraints, thereby activating the kinase. In silico studies identified potential binding sites on the kinase domain, one of which was validated biochemically. In HeLa cells, S1P-dependent activation of aPKC suppressed apoptosis. Together, our findings identify a previously undescribed molecular mechanism of aPKC regulation, a molecular target for S1P in cell survival regulation, and a tool to further explore the biochemical and biological functions of aPKC.