Protein kinase C alpha (PKCα) can activate both pro- and anti-tumorigenic signaling depending upon cellular context. Here, we investigated the role of PKCα in lung tumorigenesis in vivo. Gene expression data sets revealed that primary human non-small lung cancers (NSCLC) express significantly decreased PKCα levels, indicating that loss of PKCα expression is a recurrent event in NSCLC. We evaluated the functional relevance of PKCα loss during lung tumorigenesis in three murine lung adenocarcinoma models (LSL-Kras, LA2-Kras and urethane exposure). Genetic deletion of PKCα resulted in a significant increase in lung tumor number, size, burden and grade, bypass of oncogene-induced senescence, progression from adenoma to carcinoma and a significant decrease in survival in vivo. The tumor promoting effect of PKCα loss was reflected in enhanced Kras-mediated expansion of bronchio-alveolar stem cells (BASCs), putative tumor-initiating cells, both in vitro and in vivo. LSL-Kras/Prkca(-/-) mice exhibited a decrease in phospho-p38 MAPK in BASCs in vitro and in tumors in vivo, and treatment of LSL-Kras BASCs with a p38 inhibitor resulted in increased colony size indistinguishable from that observed in LSL-Kras/Prkca(-/-) BASCs. In addition, LSL-Kras/Prkca(-/-) BASCs exhibited a modest but reproducible increase in TGFβ1 mRNA, and addition of exogenous TGFβ1 to LSL-Kras BASCs results in enhanced growth similar to untreated BASCs from LSL-Kras/Prkca(-/-) mice. Conversely, a TGFβR1 inhibitor reversed the effects of PKCα loss in LSL-Kras/Prkca(-/-) BASCs. Finally, we identified the inhibitors of DNA binding (Id) Id1-3 and the Wilm's Tumor 1 as potential downstream targets of PKCα-dependent tumor suppressor activity in vitro and in vivo. We conclude that PKCα suppresses tumor initiation and progression, at least in part, through a PKCα-p38MAPK-TGFβ signaling axis that regulates tumor cell proliferation and Kras-induced senescence. Our results provide the first direct evidence that PKCα exhibits tumor suppressor activity in the lung in vivo.