Mechanism of the inhibitory effect of isoprenoid farnesol on cell proliferation has been studied in human acute leukemia CEM-C1 cells. Farnesol (20 microM) reduced the rate of radioactive label incorporation into cellular diacylglycerol (DAG) and phosphocholine, the products of degradation of phosphatidylcholine (PC), indicating inhibition of PC-specific phospholipase C after about 1 h of incubation. Inhibition of phospholipase D by farnesol at the later incubation time (about 2 h) was demonstrated by a decrease in synthesis of PC-derived phosphatidylethanol in the presence of ethanol. These effects of farnesol on PC degradation and formation of DAG were followed by apoptotic fragmentation of cellular DNA and inhibition of cell growth. Exogenous DAG reduced the level of DNA fragmentation and cell growth inhibition. Results are consistent with the involvement of cellular signal transduction in the mechanism of inhibition of cell proliferation by farnesol.