We investigated the mechanisms by which protein kinase C (PKC) regulates the expression of the alpha2(I) collagen gene in normal dermal fibroblasts. Reduction of PKC-alpha activity by treatment with Gö697-6 or by overexpression of a dominant negative (DN) mutant form decreased alpha2(I) collagen gene expression. This decrease required a sequence element in the collagen promoter that contains Sp1/Sp3 binding sites. Reduction of PKC-delta activity by rottlerin or overexpression of DN PKC-delta also decreased alpha2(I) collagen gene expression. This effect required a separate sequence element containing Sp1/Sp3-binding sites and an Ets-binding site. In both cases, point mutations within the response elements abrogated the response to PKC inhibition. Forced overexpression of Sp1 rescued the PKC inhibitor-mediated reduction in collagen protein expression. A DNA affinity precipitation assay revealed that inhibition of PKC-delta by rottlerin increased the binding activity of endogenous Fli1 and decreased that of Ets1. On the other hand, TGF-beta1, which increased the expression of PKC-delta, had the opposite effect, increasing the binding activity of Ets1 and decreasing that of Fli1. Our results suggest that PKC-delta is involved in the regulation of the alpha2(I) collagen gene in the presence or absence of TGF-beta. Alteration of the balance of Ets1 and Fli1 may be a novel mechanism regulating alpha2(I) collagen expression.