Protein kinase C (PKC) isozymes function as tumor suppressors in increasing contexts. In contrast to oncogenic kinases, whose function is acutely regulated by transient phosphorylation, PKC is constitutively phosphorylated following biosynthesis to yield a stable, autoinhibited enzyme that is reversibly activated by second messengers. Here, we report that the phosphatase PHLPP1 opposes PKC phosphorylation during maturation, leading to the degradation of aberrantly active species that do not become autoinhibited. Cancer-associated hotspot mutations in the pseudosubstrate of PKCβ that impair autoinhibition result in dephosphorylated and unstable enzymes. Protein-level analysis reveals that PKCα is fully phosphorylated at the PHLPP site in over 5,000 patient tumors, with higher PKC levels correlating (1) inversely with PHLPP1 levels and (2) positively with improved survival in pancreatic adenocarcinoma. Thus, PHLPP1 provides a proofreading step that maintains the fidelity of PKC autoinhibition and reveals a prominent loss-of-function mechanism in cancer by suppressing the steady-state levels of PKC.