Reactive oxidants contribute to the alterations in endothelial and epithelial permeability that characterize the inflammatory response. We previously noted that noncytolytic doses of oxidants reversibly decreased the electrical resistance across cultured monolayers of Madin-Darby canine kidney (MDCK) cells (J. Clin. Invest. 76: 1155-1168, 1985). In this investigation, we have found that similar doses of oxidants initiate inositol phospholipid hydrolysis by a phospholipase C in cultured MDCK cells, with resultant increases in inositol polyphosphates, phosphatidic acid, and 1,2 diglycerides. Activation of this pathway is linked to activation of protein kinase C in many cells. The addition of phorbol 12,13-dibutyrate (PDBU) and 1-oleoyl-2-acetyl-sn-glycerol, activators of protein kinase C, decreased the electrical resistance across MDCK monolayers cultured on micropore filters similar to the effects of hydrogen peroxide. In contrast, the addition of 4 alpha-phorbol 12,13-didecanoate, a chemically similar compound that does not activate protein kinase C, did not decrease the electrical resistance. When MDCK monolayers were exposed to PDBU, fixed, and stained with rhodamine phallicidin, the peripheral band of actin in the cells showed a loss of staining density and continuity similar to the changes in phallicidin staining we previously noted in cells exposed to hydrogen peroxide. These data are consistent with the hypothesis that some of the reversible effects of oxidants on epithelial barriers are mediated through phospholipase C hydrolysis of inositol phospholipids with consequent activation of protein kinase C.