Nb2 rat lymphoma cells are dependent on prolactin (PRL) for growth. Membrane lipid composition of Nb2 cells undergoes rapid modification when these cells are grown in culture media supplemented with specific fatty acids. Since the actions of PRL are mediated through specific membrane receptors, the following studies were conducted to characterize the lipid-dependent events involved in fatty acid modulation of PRL-induced cell proliferation. Nb2 cells were grown in suspension cultures in control or fatty acid-supplemented media, in the presence of various doses of PRL. PRL-induced cell growth was significantly enhanced by arachidonate, but significantly attenuated by stearate supplementation of the culture media. A direct relationship was observed between the concentration of specific fatty acid added to the culture media and the magnitude with which this fatty acid was incorporated into Nb2 cell membranes, as determined by gas chromatography. Acute treatment with phorbol ester enhanced Nb2 cell growth in control media and reversed the attenuating effects of membrane stearic acid enrichment. However, PRL-induced Nb2 cell growth was similar with or without the presence of phorbol ester, when cells were grown in media supplemented with arachidonate. Addition of protein kinase C (PKC) inhibitors to control and fatty acid-supplemented media resulted in a dose-dependent inhibition of PRL-induced Nb2 cell proliferation. These results suggest that lipid modulation of Nb2 mitogenic-responsiveness to PRL is mediated through alterations in PKC activation.