Previous studies showed that the human monocytic leukemia cell line THP-1 can be induced to undergo monocytic differentiation by tumor promoting phorbol esters (TPA), suggesting that protein kinase C (PK-C), the primary binding site of TPA, may play a role in the control of monocytic differentiation. The effect of exogenous phospholipase C (PLC) on THP-1 cells was investigated. Within 24-48 hr, PLC induced over 40% of THP-1 cells to undergo monocytic differentiation as manifested by adherence, growth arrest, functional expression, morphological changes and expression of c-fms gene which encode for M-CSF receptors. Compared to TPA, however, the inducing activity of PLC was weaker, slower and not as effective. PLC treatment also induced a transient expression of c-fos proto-oncogene prior to c-fms expression. On the contrary, the level of c-myc RNA, which is constitutively expressed in THP-1 cells, was down-regulated 48 hr after PLC treatment. The PLC-induced monocytic differentiation in THP-1 cells was inhibited by staurosporine, a potent PK-C inhibitor, further suggesting that direct activation of the PK-C is one of the metabolic events essential for monocytic differentiation. It is postulated that in THP-1 cells the metabolic pathway transducing PK-C activation has been permanently blocked, thereby leading to uncontrolled proliferation without differentiation.