Protein kinase C has a crucial role in signal transduction for a variety of biologically active substances which activate cellular functions and proliferation. When cells are stimulated, protein kinase C is transiently activated by diacylglycerol which is produced in the membrane during the signal-induced turnover of inositol phospholipids. Tumour-promoting phorbol esters, when intercalated into the cell membrane, may substitute for diacylglycerol and permanently activate protein kinase C. The enzyme probably serves as a receptor for the tumour promoters. Further exploration of the roles of this enzyme may provide clues for understanding the mechanism of cell growth and differentiation.