K(+) channels participate in the regulatory volume decrease (RVD) accompanying hepatocellular nutrient uptake and bile formation. We recently identified KCNQ1 as a molecular candidate for a significant fraction of the hepatocellular swelling-activated K(+) current (I(KVol)). We have shown that the KCNQ1 inhibitor chromanol 293B significantly inhibited RVD-associated K(+) flux in isolated perfused rat liver and used patch-clamp techniques to define the signaling pathway linking swelling to I(KVol) activation. Patch-electrode dialysis of hepatocytes with solutions that maintain or increase phosphatidylinositol 4,5-bisphosphate (PIP(2)) increased I(KVol), whereas conditions that decrease cellular PIP(2) decreased I(KVol). GTP and AlF(4)(-) stimulated I(KVol) development, suggesting a role for G proteins and phospholipase C (PLC). Supporting this, the PLC blocker U-73122 decreased I(KVol) and inhibited the stimulatory response to PIP(2) or GTP. Protein kinase C (PKC) is involved, because K(+) current was enhanced by 1-oleoyl-2-acetyl-sn-glycerol and inhibited after chronic PKC stimulation with phorbol 12-myristate 13-acetate (PMA) or the PKC inhibitor GF 109203X. Both I(KVol) and the accompanying membrane capacitance increase were blocked by cytochalasin D or GF 109203X. Acute PMA did not eliminate the cytochalasin D inhibition, suggesting that PKC-mediated I(KVol) activation involves the cytoskeleton. Under isotonic conditions, a slowly developing K(+) current similar to I(KVol) was activated by PIP(2), lipid phosphatase inhibitors to counter PIP(2) depletion, a PLC-coupled alpha(1)-adrenoceptor agonist, or PKC activators and was depressed by PKC inhibition, suggesting that hypotonicity is one of a set of stimuli that can activate I(KVol) through a PIP(2)/PKC-dependent pathway. The results indicate that PIP(2) indirectly activates hepatocellular KCNQ1-like channels via cytoskeletal rearrangement involving PKC activation.