We previously reported that ras and polyoma middle T (PyMT), a constitutive activator of the src protooncogene product, up-regulated Caco-2 cell proliferation along with protein kinase C (PKC) alpha expression and PKC activity. We aimed to investigate whether oncogene-induced up-regulation of Caco-2 cell proliferation involved stimulation of the autocrine IGF-II/IGF-I receptor (IGFIR) loop described in these cells and if so, to analyse the role of overexpressed and activated PKC. Compared with control vector transfected Caco-2 cells, ras- and PyMT-transfected cells exhibited increased expression of the 6.0 and 4.8 kb IGF-II transcripts. This was due to increased activity of the P3 and P4 promoters of the IGF-II gene which correlated with increased expression and DNA-binding activity of Sp1, a transcription factor interacting with several specific sites in P3 and P4 promoters. Oncogene-transfected cells displayed enhanced autocrine IGF-II production, which was fully responsible for the oncogene-induced increase in their proliferation since this increase was blunted by anti-human IGF-II and IGF1R (alphaIR3) antibodies. PKC mediated oncogene activation of the IGF-II gene presumably through action on Sp1 since (i) PKC activation by phorbol 12-myristate 13-acetate increased Sp1 expression, P3 and P4 activity and IGF-II mRNA in control but not in oncogene-transfected cells; and (ii) PKC inhibition by the PKC inhibitor Gö6976 reduced Sp1, P3 and P4 activity and IGF-II mRNA in all three cell lines. This is the first evidence that ras- and PyMT/src oncogenes up-regulate Caco-2 cell proliferation through a PKC-mediated pathway which stimulates IGF-II gene transcription and thereby increases autocrine IGF-II production. The mechanisms underlying IGF-II gene activation by PKC most probably involve action on Sp1.