The physiological importance of protein kinase C during oligodendrocyte progenitor maturation was investigated by analyzing the effects of the protein kinase C activator phorbol 12-myristate 13-acetate (TPA) on the morphology, proliferation, and differentiation of oligodendrocytes at sequential stages of development. Monoclonal antibodies A2B5 and O4 were used to identify the A2B5+O4- and the A2B5+O4+ galactocerebroside- progenitor stages. Anti-galactocerebroside and anti-myelin basic protein were used to identify mature, post-mitotic oligodendrocytes. Proliferation was measured by bromodeoxyuridine incorporation. Within 24 hr after addition, TPA induced a downregulation of the 04 antigen in OL progenitors, and an increase of expression of the intermediate filament protein vimentin, leading to a phenotypic reversion from the vimentin- A2B5+O4+ phenotype to the less mature vimentin+ A2B5+O4- stage. Concomitantly, TPA induced an increase in the number of bromodeoxyuridine-labeled oligodendrocyte progenitors and extensive process elongation. The response of O4+ progenitors was transient. Even with continued exposure to TPA, by 4 days after TPA addition the reverted cells ceased proliferation, reacquired O4 immunoreactivity, became vimentin-negative, and began to express galactocerebroside and myelin basic protein, and to display the complex, highly branched morphology characteristic of terminally differentiated oligodendrocytes. These results indicate that modulation of protein kinase C activity by TPA induces a transient reversion of O4+ progenitors to less mature O4- cells, causing a transient inhibition of terminal differentiation. The relationship of these data to similar responses of the OL lineage to specific growth factors and implications for remyelination after pathologic injury are discussed.