Sid1p is a group II p21-activated kinase/germinal center kinase family member that is part of a signaling network required for cytokinesis in fission yeast. Germinal center kinases are characterized by well conserved amino-terminal catalytic domains followed by less conserved carboxyl termini. The carboxyl termini among group I germinal center kinases are moderately conserved and thought to be regulatory regions. Little is known about the carboxyl termini of group II family members. Sid1p has been shown to bind the novel protein Cdc14p; however, the functional significance of this interaction is unknown. Here we report that the carboxyl terminus of Sid1p is an essential regulatory region. Our results indicate that this region contains the binding domain for Cdc14p, and this association is required for full Sid1p catalytic activity as well as intracellular localization. Furthermore, overexpression of the carboxyl terminus of Sid1p alone compromises the signaling of cytokinesis. We conclude that Cdc14p positively regulates the Sid1p kinase by binding the noncatalytic carboxyl-terminal region of the protein.