Cell proliferation, metabolism, migration and survival are coordinated through the tight control of two target of rapamycin (TOR) kinase complexes: TORC1 and TORC2. Here, we show that a novel phosphorylation of fission yeast Gad8 (AGC kinase) on the evolutionarily conserved threonine 6 (Thr6) prevents the physical association between Gad8 and TORC2. Accordingly, this block to protein interactions by Gad8 Thr6 phosphorylation decreases TORC2-controlled activation of Gad8. Likewise, phosphorylation of Gad8 Thr6, possibly by PKC, prevents the association of Gad8 with TORC2 thereby increasing TORC2 activity, because it reduces Gad8-mediated feedback inhibition of TORC2. Consistently, the introduction of a Gad8 T6D mutant, that mimics phosphorylation, increased TORC2 activity. Increased PKC(Pck2) expression prevented Gad8-TORC2 binding and so reduced the TORC2-mediated phosphorylation of Gad8 serine 546 that activates Gad8. Interestingly, independent of the Ser546 phosphorylation status, Gad8 Thr6 phosphorylation is important for remodelling the actin cytoskeleton and survival upon potassium ion and heat stresses. In contrast, Ser546 phosphorylation is required for the control of G1 arrest, mating, cell length at division and vascular size. Finally, these findings reveal a novel mode of TORC2 activation that is essential for cell survival following stress. 