The zinc finger transcription factor PacC undergoes two-step proteolytic activation in response to alkaline ambient pH. PalA is a component of the fungal ambient pH signal transduction pathway. Its mammalian homologue AIP1/Alix interacts with the apoptosis-linked protein ALG-2. We show that both PalA and AIP1/Alix recognize a protein-protein binding motif that we denote YPXL/I, where Tyr, Pro, and Leu/Ile are crucial for its interactive properties. Two such motifs flanking the signaling protease cleavage site mediate direct binding of PalA to PacC, required for the first and only pH-regulated cleavage of this transcription factor. PalA can bind the “closed” (i.e., wild-type full-length) conformer of PacC, suggesting that PalA binding constitutes the first stage in the two-step proteolytic cascade, recruiting or facilitating access of the signaling protease, presumably PalB. In addition to recognizing YPXL/I motifs, both PalA and AIP1/Alix interact with the Aspergillus class E Vps protein Vps32 homologue, a member of a protein complex involved in the early steps of the multivesicular body pathway, suggesting that this interaction is an additional feature of proteins of the PalA/AIP1/Alix family.