Some investigators have reported previously that phorbol esters inhibit in vitro erythropoietin production stimulated by hypoxia; whereas others have reported that phorbol esters enhanced Epo production during exposure to hypoxia. We have demonstrated in the present experiments that hypoxia significantly increased diacylglycerol levels in cultured human hepatocellular carcinoma (Hep3B) cells. 1-oleoyl-2-acetyl-ras-glycerol (OAG) and N-(6-phenylhexyl)-5-chloro-1-naphthalenesulfonamide (SC-9), two well-known protein kinase C activators, significantly increased medium levels of erythropoietin as well as erythropoietin messenger RNA levels in normoxic Hep3B cells. A potent protein kinase C inhibitor, chelerythrine chloride, significantly decreased hypoxia-induced increases in medium levels of erythropoietin as well as erythropoietin messenger RNA levels in Hep3B cells. A cis-unsaturated free fatty acid, oleic acid, significantly enhanced OAG-induced medium levels of erythropoietin in normoxic Hep3B cells, whereas a phospholipase A2 inhibitor, mepacrine, significantly decreased hypoxia-induced erythropoietin production in Hep3B cells. These results provide strong support for a positive role for protein kinase C in the hypoxic regulation of erythropoietin production.