In an effort to study further the mechanism of Cdc28 function and cell cycle commitment, we describe here a genetic approach to identify components of pathways downstream of the Cdc28 kinase at START by screening for mutations that decrease the effectiveness of signaling by Cdc28. The first locus to be characterized in detail using this approach was PKC1 which encodes a homolog of the Ca(2+)-dependent isozymes of the mammalian protein kinase C (PKC) superfamily (Levin et al., 1990). By several genetic criteria, we show a functional interaction between CDC28 and PKC1 with PKC1 apparently functioning with respect to bud emergence downstream of START. Consistent with this, activity of the MAP kinase homolog Mpk1 (a putative Pkc1 effector) is stimulated by activation of Cdc28. Furthermore, we demonstrate a cell cycle-dependent hydrolysis of phosphatidylcholine to diacylglycerol (a PKC activator) and choline phosphate at START. Diacylglycerol production is stimulated by Cdc28 in cycling cells and is closely associated with Cdc28 activation at START. These results imply that the activation of Pkc1, which is known to be necessary during bud morphogenesis, is mediated via the CDC28-dependent stimulation of PC-PLC activity in a novel cell cycle-regulated signaling pathway.