Accumulating evidence suggests that neuroepithelial bodies are airway O(2) sensors. Recently, we have established the H-146 small cell lung carcinoma line as a suitable model to study the biochemical basis of neuroepithelial body cell chemotransduction. Here we explore the possibility that hypoxic modulation of K(+) channels is intimately linked to activity of NADPH oxidase. Graded hypoxia caused graded inhibition of whole cell K(+) currents, which correlated well with membrane depolarization. Pretreatment with the phorbol ester, 12-O-tetradecanoyl (TPA), inhibited K(+) currents at all potentials. Although 4alpha-phorbol 12,13-didecanoate and TPA in the presence of bisindolylmaleimide were also able to depress K(+) currents, only TPA could significantly ameliorate hypoxic depression of these currents. Thus, protein kinase C (PKC) activation modulates the sensitivity of these cells to changes in pO(2). Furthermore, because the addition of H(2)O(2), a downstream product of NADPH oxidase, could only activate K(+) currents during hypoxia (when endogenous H(2)O(2) production is suppressed), it appears likely that PKC modulates the affinity of NADPH oxidase for O(2) potentially via phosphorylation of the p47(phox) subunit, which is present in these cells. These data show that PKC is an important regulator of the O(2)-transduction pathway and suggests that NADPH oxidase represents a significant component of the airway O(2) sensor.