The metalion vanadate has insulin-like effects and has been advocated for use in humans as a therapeutic modality for diabetes mellitus. However, since vanadate is a tyrosine phosphatase inhibitor, it may result in undesirable activation of target cells. We studied the effect of vanadate on human mesangial cells, an important target in diabetic nephropathy. Vanadate stimulated DNA synthesis and PDGF B chain gene expression. Vanadate also inhibited total tyrosine phosphatase activity and stimulated tyrosine phosphorylation of a set of cellular proteins. Two chemically and mechanistically dissimilar tyrosine kinase inhibitors, genistein and herbimycin A, blocked DNA synthesis induced by vanadate. Vanadate also stimulated phospholipase C and protein kinase C. Downregulation of protein kinase C abolished vanadate-induced DNA synthesis. Thus, vanadate-induced mitogenesis is dependent on tyrosine kinases and protein kinase C activation. The most likely mechanism for the effect of vanadate on these diverse processes involves the inhibition of cellular phosphotyrosine phosphatases. These studies demonstrating that vanadate activates mesangial cells may have major implications for the therapeutic potential of vanadate administration in diabetes. Although vanadate exerts beneficial insulin-like effects and potentiates the effect of insulin in sensitive tissue, it may result in undesirable activation of other target cells, such as mesangial cells.