Perturbations in endoplasmic reticulum (ER) homeostasis, a condition termed ER stress, activate the unfolded protein response (UPR), an intracellular network of signaling pathways. Recently, we have shown that protein kinase Kin1 and its paralog, Kin2, in the budding yeast Saccharomyces cerevisiae (orthologs of microtubule affinity-regulating kinase in humans) contribute to the UPR function. These Kin kinases contain a conserved kinase domain and an autoinhibitory kinase-associated 1 (KA1) domain separated by a long undefined domain. Here, we show that Kin1 or Kin2 protein requires minimally a kinase domain and an adjacent kinase extension region (KER) for UPR function. We also show that the functional mini-Kin2 protein is predominantly visualized inside the cells and precipitated with the cellular membrane fraction, suggesting its association with the cellular endomembrane system. Furthermore, we show that transphosphorylation of the Kin1 residue T302 and the analogous Kin2 residue T281 within the activation loop are important for full kinase activity. Collectively, our data suggest that, during ER stress, the Kin kinase domain is released from its autoinhibitory KA1 domain and is activated by transphosphorylation.