Erythroid differentiation of normal human hematopoietic progenitor cells was drastically inhibited by phorbol ester, 12-myristate 13-acetate (PMA), an agent known to activate the class of serine-threonine kinases, protein kinase C (PKC). This inhibition was accompanied by augmented megakaryocytic differentiation as demonstrated by expression of megakaryocyte-specific mRNAs and proteins. These effects of PMA were reversed by two specific antagonists of PKC. Analysis of single colonies transferred from cultures not containing PMA to PMA-containing cultures indicated that, in this system, PMA exerts megakaryocytic differentiating activity directly on cells which may have already initiated a progression toward the erythroid pathway of differentiation. These results suggest that modulation of PKC activity plays a role in erythroid and megakaryocytic differentiation, and may constitute an important selective signal between these pathways during normal blood cell development.