We investigated the signal transduction system when the proliferation of cultured Schwann cells was activated by glial growth factor (GGF). When 10 mug/ml of GGF was added to the culture medium, Schwann cell division was activated by about 3-fold, while protein kinase C (PKC) activity was translocated from the cytosol to the particulate fraction, and diacylglycerol (DG) production was increased in the cells. PKC activity in the particulate fraction and intracellular DG content increased to 167% and 158%, respectively. However, intracellular cyclic AMP levels remained unchanged. The GGF-induced proliferation of Schwann cells was significantly inhibited by staurosporine, a PKC inhibitor, in a dose-dependent manner, while H-8, a specific inhibitor for cyclic nucleotide-dependent protein kinases, did not show an inhibitory effect even at a high concentration. These data suggest that the signal transduction system through PKC is involved in the proliferation of Schwann cells when treated with GGF.