In rat pheochromocytoma cells (PC-12) cells, we have studied the effect of protein kinase C (PKC) and cAMP on the activity of the nuclear transcription factor activator protein-1 (AP-1) and on differentiation of the cells into sympathetic nerve-like phenotype. By using mobility gel-shift assays, we found that both PKC and cAMP activation led to an increase in the binding of AP-1 to its consensus nucleotide sequence (TRE). When the PKC and cAMP pathways were activated simultaneously, a clear-cut synergistic effect was seen on the binding of AP-1 to TRE. Both PKC and cAMP activation were furthermore able to increase the AP-1 transcriptional activity in PC-12 cells transiently transfected with TRE-expressing plasmids. In agreement with the mobility gel-shift results, simultaneous activation of PKC and cAMP synergistically increased the AP-1 transcriptional activity. We next analyzed the effect of PKC and cAMP stimulation on differentiation and proliferation of PC-12 cells. Whereas PKC activation had no effect on the morphology of PC-12 cells, elevation of the intracellular cAMP level resulted in a marked increase in the number of neurite-bearing cells. This effect was paralleled by a strong inhibition of PC-12 cell proliferation. Interestingly, when PKC and cAMP activation were combined, the differentiation was further pronounced and growth further inhibited. These results show that both PKC and cAMP increase the AP-1 activity in PC-12 cells, and that these effects are synergistic. Moreover, we show that cAMP induces differentiation and inhibits growth of PC-12 cells, and that PKC activation acts synergistically with cAMP on these effects. The possible role of AP-1 in PC-12 cell differentiation is discussed.