The purported protein kinase C (PKC) inhibitor, staurosporine (Stsp) has been reported to activate PKC in epidermal keratinocytes, eliciting many of the same effects as active tumor promoters such as tetradecanoylphorbol acetate (TPA). We investigated the effects of these two agents (TPA and Stsp) on the activation of phospholipase D (PLD) in primary mouse epidermal keratinocytes. PLD catalyzes the hydrolysis of membrane phospholipids to produce phosphatidic acid (PA), which can be converted to diacylglycerol (DAG) by PA phosphohydrolases. PLD activation has been suggested to underlie the sustained increase in DAG content and induction of differentiation in keratinocytes exposed to ganglioside GQ 1 b (m. Seishima, et al., J. Invest. Dermatol. 104: 835-838, 1995). We used the unique ability of PLD to catalyze the ethanolysis of radiolabeled phospholipids in the presence of small amounts of ethanol to yield the novel phospholipid phosphatidylethanol (PEt). Monitoring the formation of [ 3 H]PEt and PA in [ 3 H]oleate-prelabeled cells as a measure of PLD activation, we found that TPA dose-dependently (0.1 nM to 1 μM) increased PLD activity in a sustained fashion (up to 60 minutes). Furthermore, this activation appeared to be mediated by PKC, as the selective PKC inhibitor Ro 31-8220 at doses between 0.1 and 2 μM blocked the increase in radiolabeled PA and PEt formation. Stsp, on the other hand, did not activate PLD at concentrations ranging from 0.1 nM to 2 μM. Furthermore, this agent was able to inhibit the TPA-induced activation of PLD. This result is somewhat surprising in view of the ability of Stsp to induce terminal differentiation and the reported role of PLD in this process. We hypothesize that Stsp may be directly activating the enzyme (presumably a PKC isoenzyme) involved in the induction of differentiation.