The chemokine stromal cell-derived factor-1 (SDF-1) and its receptor, CXCR4, play a major role in migration, retention, and development of hematopoietic progenitors in the bone marrow. We report the direct involvement of atypical PKC-zeta in SDF-1 signaling in immature human CD34(+)-enriched cells and in leukemic pre-B acute lymphocytic leukemia (ALL) G2 cells. Chemotaxis, cell polarization, and adhesion of CD34(+) cells to bone marrow stromal cells were found to be PKC-zeta dependent. Overexpression of PKC-zeta in G2 and U937 cells led to increased directional motility to SDF-1. Interestingly, impaired SDF-1-induced migration of the pre-B ALL cell line B1 correlated with reduced PKC-zeta expression. SDF-1 triggered PKC-zeta phosphorylation, translocation to the plasma membrane, and kinase activity. Furthermore we identified PI3K as an activator of PKC-zeta, and Pyk-2 and ERK1/2 as downstream targets of PKC-zeta. SDF-1-induced proliferation and MMP-9 secretion also required PKC-zeta activation. Finally, we showed that in vivo engraftment, but not homing, of human CD34(+)-enriched cells to the bone marrow of NOD/SCID mice was PKC-zeta dependent and that injection of mice with inhibitory PKC-zeta pseudosubstrate peptides resulted in mobilization of murine progenitors. Our results demonstrate a central role for PKC-zeta in SDF-1-dependent regulation of hematopoietic stem and progenitor cell motility and development.