The role of diacylglycerol (DG) formation from phosphatidylcholine in mitogenic signal transduction is poorly understood. We have generated this lipid at the plasma membrane by treating Rat-1 fibroblasts with bacterial phosphatidylcholine-specific phospholipase C (PC-PLC). This treatment leads to activation of mitogen-activated protein kinase (MAPK). However, unlike platelet-derived growth factor (PDGF) or epidermal growth factor (EGF), PC-PLC fails to activate Ras and to induce DNA synthesis, and activates MAPK only transiently (<45 min). Down-regulation of protein kinase C (PKC) -alpha, -delta and -epsilon isotypes has little or no effect on MAPK activation by either PC-PLC or growth factors. However, Ro 31-8220, a highly selective inhibitor of all PKC isotypes, including atypical PKC-zeta but not Raf-1, blocks MAPK activation by PDGF and PC-PLC, but not that by EGF, suggesting that atypical PKC mediates the PDGF and PC-PLC signal. In line with this, PKC-zeta is activated by PC-PLC and PDGF, but not by EGF, as shown by a kinase assay in vitro, using biotinylated epsilon-peptide as a substrate. Furthermore, dominant-negative PKC-zeta inhibits, while (wild-type) PKC-zeta overexpression enhances MAPK activation by PDGF and PC-PLC. The results suggest that DG generated by PC-PLC can activate the MAPK pathway independent of Ras and phorbol-ester-sensitive PKC but, instead, via PKC-zeta.