Atypical protein kinase C (aPKC) isozymes modulate insulin signaling and cell polarity, but how their activity is controlled in cells is not well understood. These enzymes are constitutively phosphorylated, insensitive to second messengers, and have relatively low activity. Here we show that protein scaffolds not only localize but also differentially control the catalytic activity of the aPKC PKCζ, thus promoting activity toward localized substrates and restricting activity toward global substrates. Using cellular substrate readouts and scaffolded activity reporters in live cell imaging, we show that PKCζ has highly localized and differentially controlled activity on the scaffolds p62 and Par6. Both scaffolds tether aPKC in an active conformation as assessed through pharmacological inhibition of basal activity, monitored using a genetically encoded reporter for PKC activity. However, binding to Par6 is of higher affinity and is more effective in locking PKCζ in an active conformation. FRET-based translocation assays reveal that insulin promotes the association of both p62 and aPKC with the insulin-regulated scaffold IRS-1. Using the aPKC substrate MARK2 as another readout for activity, we show that overexpression of IRS-1 reduces the phosphorylation of MARK2 and enhances its plasma membrane localization, indicating sequestration of aPKC by IRS-1 away from MARK2. These results are consistent with scaffolds serving as allosteric activators of aPKCs, tethering them in an active conformation near specific substrates. Thus, signaling of these intrinsically low activity kinases is kept at a minimum in the absence of scaffolding interactions, which position the enzymes for stoichiometric phosphorylation of substrates co-localized on the same protein scaffold.