In murine keratinocytes, Ca++-induced terminal differentiation is accompanied by a rapid and sustained increase of inositol phosphates and diacylglycerol. Based on Western blotting analysis, basal keratinocytes cultured in 0.05 mM Ca++ medium express phospholipase C (PLC)-gamma1 predominantly and no detectable PLC-beta1. Differentiating keratinocytes cultured in 1.4 mM Ca++ express two- to threefold more PLC-gamma1 protein and PLC-delta1, but no detectable PLC-beta1. Although the amount of PLC-gamma1 and -delta1 protein increased, PLC-gamma1 and -delta1 mRNA decreased in differentiating cells. Thus the sustained rise of PLC activity induced by Ca++ in differentiating keratinocytes may be associated with higher amounts of both PLC-gamma1 and -delta1 in maturing cells, determined by a posttranscriptional mechanism. Tyrosine phosphate content in PLC-gamma1 was low in basal cells and did not change in cells exposed to 1.4 mM Ca++. However, genistein inhibited the increase in PLC activity induced by 1.4 mM Ca++. In contrast, transforming growth factor (TGF)alpha, which stimulates both PLC activity and growth in basal keratinocytes, increased tyrosine phosphorylation of PLC-gamma1. These results suggest that tyrosine phosphorylation of PLC-gamma1 by the epidermal growth factor (EGF) receptor is linked to stimulated proliferation, whereas stimulation of PLC activity by Ca++ is linked to keratinocyte differentiation and involves the action of a tyrosine kinase but not tyrosine phosphorylation of PLC-gamma1. Based on studies using the intracellular free Ca++ chelator BAPTA, a rise in intracellular free Ca++ was not required for stimulation of PLC activity by raising extracellular Ca++. Phorbol esters inhibited PLC stimulation by 1.4 mM Ca++ medium and increased serine phosphorylation of PLC-gamma1. Exogenous phosphatidylinositol-specific and phosphatidylcholine-specific bacterial PLC also inhibited endogenous inositol phosphate formation and increased endogenous diacylglycerol (DAG). Thus, direct serine phosphorylation of PLC-gamma1 by protein kinase C is associated with the inhibition of Ca++-mediated PLC stimulation. These results show that keratinocytes have multiple mechanisms to regulate PLC activity in response to a specific signal.