The atypical protein kinase C (aPKC) is required for cell polarization of many cell types, and is upregulated in several human tumors. Despite its importance in cell polarity and growth control, relatively little is known about how aPKC activity is regulated. Here, we use a biochemical approach to identify Dynamin-associated protein 160 (Dap160; related to mammalian intersectin) as an aPKC-interacting protein in Drosophila. We show that Dap160 directly interacts with aPKC, stimulates aPKC activity in vitro and colocalizes with aPKC at the apical cortex of embryonic neuroblasts. In dap160 mutants, aPKC is delocalized from the neuroblast apical cortex and has reduced activity, based on its inability to displace known target proteins from the basal cortex. Both dap160 and aPKC mutants have fewer proliferating neuroblasts and a prolonged neuroblast cell cycle. We conclude that Dap160 positively regulates aPKC activity and localization to promote neuroblast cell polarity and cell cycle progression.