We have previously suggested that the interaction between luteinizing hormone (LH) and its receptor, in addition to stimulating adenylate cyclase, is able to trigger a negative regulatory signal at a step beyond cAMP synthesis (Benhaim et al. (1987) FEBS Lett. 223, 321-326). The present study was conducted to determine whether the phospholipase C system is involved in this phenomenon. Small bovine luteal cells from pregnant cows were incubated with phospholipase C, A23187, an ionophore of calcium and/or phorbol 12-myristate 13-acetate (PMA), an activator of protein kinase C (PKC), in the presence or absence of bovine luteinizing hormone or dibutyryl cyclic AMP (dbcAMP). A23187 associated with PMA was able to mimic the stimulatory effect of phospholipase C on basal progesterone production, whereas neither A23187 nor PMA alone had any effect. In the presence of high doses of LH, phospholipase C inhibited progesterone and cAMP production in a dose-dependent manner. A23187 and PMA were able to mimic the inhibition of progesterone synthesis but stimulated LH-induced cAMP accumulation. When cells were stimulated by high doses of dbcAMP, phospholipase C and A23187 but not PMA inhibited progesterone synthesis. These observations suggest that (1) phospholipase C can mimic the post-cAMP negative regulatory signal induced in vitro by high doses of LH, in the presence of an activation of PKC; (2) phospholipase C is also able to mimic in vitro the luteolytic properties of prostaglandin F2 alpha that we previously described (Benhaim et al. (1987) Prostaglandins 33, 227-239); and (3) under basal conditions or in the presence of low doses of LH, the phospholipase C system slightly stimulates steroidogenesis.