We earlier showed that the diacylglycerol (DG) lipase inhibitor, RHC 80267, increased the steady-state level of DG and inhibited the release of arachidonic acid (AA) in carbamylcholine (CCh)-stimulated pancreatic minilobules (J. F. Dixon and L. E. Hokin, (1984) J. Biol. Chem. 259, 14418-14425). There was no effect on phospholipid metabolism. We have now investigated the effect of RHC 80267 on CCh-stimulated formation of inositol monophosphate formation, cGMP formation, and amylase release. CCh (10 microM) increased cGMP formation by approximately 20-fold, and this response was inhibited 55-75% by RHC 80267 (75-100 microM). RHC 80267 had no effect on either nitroprusside- or calcium ionophore-stimulated cGMP formation, arguing against a direct inhibition of guanylate cyclase by RHC 80267. Arachidonic acid, the release of which is inhibited by RHC 80267, neither stimulated cGMP formation nor reversed the effect of RHC 80267 on CCh-stimulated cGMP formation. This suggests, but does not prove, that the rise in cGMP in response to CCh is not due to an increase in AA as has been suggested. Both phorbol myristate acetate (25 nM) and the DG kinase inhibitor R 59022 (10 microM) inhibited CCh-stimulated cGMP formation by 40%. RHC 80267 also inhibited CCh-stimulated inositol phosphate accumulation and amylase release by 60 and 40%, respectively. The data suggest that the inhibition of CCh-stimulated cGMP formation and other muscarinic responses by RHC 80267 is probably the result of feedback inhibition of the cholinergic receptor via activation of protein kinase C by the elevated DG.