Annexin V is a protein of unknown biological function that undergoes Ca(2+)-dependent binding to phospholipids located on the cytosolic face of the plasma membrane. Preliminary results presented herein suggest that a biological function of annexin V is the inhibition of protein kinase C (PKC). In vitro assays showed that annexin V was a specific high-affinity inhibitor of PKC-mediated phosphorylation of annexin I and myosin light chain kinase substrates, with half-maximal inhibition occurring at approximately 0.4 microM. Annexin V did not inhibit epidermal growth factor receptor/kinase phosphorylation of annexin I or cAMP-dependent protein kinase phosphorylation of the Kemptide peptide substrate. Since annexin V purified from both human placenta and recombinant bacteria inhibited protein kinase C activity, it is not likely that the inhibitor activity was associated with a minor contaminant of the preparations. The following results indicated that the mechanism of inhibition did not involve annexin V sequestration of phospholipid that was required for protein kinase C activation: similar inhibition curves were observed as phospholipid concentration was varied from 0 to 800 micrograms/mL; the extent of inhibition was not significantly affected by the order of addition of phospholipid, substrate, or PKC, and the core domain of annexin I was not a high-affinity inhibitor of PKC even though it had similar Ca2+ and phospholipid binding properties as annexin V. These data indirectly indicate that inhibition occurred by direct interaction between annexin V and PKC. Since the concentration of annexin V in many cell types exceeds the amounts required to achieve PKC inhibition in vitro, it is possible that annexin V inhibits PKC in a biologically significant manner in intact cells.