The products of ras and src oncogenes are thought to be important components in pathways regulating cell proliferation and differentiation. In fibroblasts transformed by these oncogenes, increased diacylglycerol levels have been found which most probably arise from activation of the turnover of phosphatidylcholine. Diacylglycerol is a key activator of protein kinase C whose role in cell growth and transformation has been proposed. We demonstrate here by using immunochemical techniques that transformation by ras or src oncogenes is associated with permanent translocation of protein kinase C to the cytoplasmic membrane. However, no down-regulation of the enzyme is observed despite its permanent activation in these transformants. Importantly, the lack of down-regulation observed in ras and src transformed cell lines is mimicked by chronic treatment of NIH 3T3 fibroblasts with exogenous Bacillus cereus phosphatidylcholine-hydrolysing phospholipase C, but not with phorbol myristate acetate or exogenous Bacillus thuringiensis phosphatidylinositol-hydrolysing phospholipase C. These results strongly suggest that diacylglycerol derived from phosphatidylcholine but not from phosphoinositide turnover is responsible for the atypical regulation of protein kinase C in cell lines transformed by ras and src oncogenes.