Phorbol ester treatment of HepG2, a human tumorigenic cell line, caused rapid morphological changes characterized by a flattening and spreading of the cells that coincided with a rapid inhibition of thymidine incorporation. Within 24 h, cell division was completely inhibited, suggesting the cells had entered a quiescent state. Continued incubation in the presence of phorbol esters resulted in the resumption of thymidine incorporation and cell division, but this coincided with only a partial down-regulation of PKC activity. Seventy-two hours of treatment was required to obtain down-regulation of greater than 80% of the PKC activity, but reversal of the inhibitory effects occurred between 24 and 48 h after the addition of phorbol esters, when a large proportion of the PKC activity was still present. Northern blot analysis of a number of transcripts showed that the steady-state levels of c-myc and transforming growth factor beta 1 (TGF-beta 1) messages increased only after 3 h of phorbol ester treatment and returned to normal levels after 24 h. C-fos, albumin, and alphafetoprotein messages were not affected, suggesting the differentiation state of the cells was not altered. Therefore, phorbol ester activation of PKC causes an inhibition of HepG2 cell growth initially, but this is unlike the promotion of differentiation seen in other systems. Partial down-regulation of PKC activity causes a reversal of the growth inhibition and the cells return to a normal growth rate. This effect is also clearly different from systems in which phorbol esters have been shown to have a mitogenic effect on cells.