We have previously reported that the purified GDP-bound alpha-subunit of the GTP-binding protein transducin (TD), present in outer segments of retinal rod cells (ROS), serves as a high affinity substrate (Km = 1 microM) for protein kinase C (PKC) [Zick et al. (1986) Proc. natn. Acad. Sci., U.S.A. 83, 9294-9297]. In the present study we demonstrate that TD-alpha undergoes phosphorylation by PKC when present in its native form in intact ROS membranes. This phosphorylation is inhibited by GTP-gamma-S which activates TD, suggesting that it is only the inactive conformation of TD-alpha that serves as a substrate for PKC. Indeed, both vanadate and AlF4, that confer an active conformation on TD-alpha-GDP, inhibit PKC-mediated phosphorylation of purified TD-alpha-GDP. We demonstrate that the purified beta subunit of TD also serves as an in vitro substrate for PKC. Moreover, following their phosphorylation, both TD-alpha and beta form high affinity complexes with PKC. This is evident from the findings that PKC coprecipitates with both the alpha and beta subunits of TD when the latter are immunoprecipitated by their respective antibodies. PKC phosphorylates additional ROS proteins of 36, 48 and 92 kDa, tentatively identified as rhodopsin, arrestin and the cGMP-phosphodiesterase. Taken together our results strongly suggest that phosphorylation of TD is of physiological relevance and that through phosphorylation of endogenous ROS proteins, PKC could play a key role in regulating phototransduction.