3-phosphoinositide dependent protein kinase-1 (PDK1) plays a key role in regulating signalling pathways by activating AGC kinases such as PKB/Akt and S6K. Here we describe the 2.0 A crystal structure of the PDK1 kinase domain in complex with ATP. The structure defines the hydrophobic pocket termed the "PIF-pocket", which plays a key role in mediating the interaction and phosphorylation of certain substrates such as S6K1. Phosphorylation of S6K1 at its C-terminal PIF-pocket-interacting motif promotes the binding of S6K1 with PDK1. In the PDK1 structure, this pocket is occupied by a crystallographic contact with another molecule of PDK1. Interestingly, close to the PIF-pocket in PDK1, there is an ordered sulfate ion, interacting tightly with four surrounding side chains. The roles of these residues were investigated through a combination of site-directed mutagenesis and kinetic studies, the results of which confirm that this region of PDK1 represents a phosphate-dependent docking site. We discuss the possibility that an analogous phosphate-binding regulatory motif may participate in the activation of other AGC kinases. Furthermore, the structure of PDK1 provides a scaffold for the design of specific PDK1 inhibitors.