Activation of the phosphatidylinositol (Ptdins) signal transduction system involves stimulation of phospholipase C (PLC) by hormones and other agonists to produce two second messengers, the inositol phosphate, lns(1,4,5)P-3 which releases calcium from intracellular stores, and diacylglycerol which activates protein kinase C (PKC). This study, using activators or inhibitors of PLC and PKC and a calcium ionophore, examined the role of the Ptdins system in mouse embryonic stem (ES) cells. The PLC inhibitor, U-73122, inhibited ES-cell proliferation and also inhibited PLC activation as evidenced by a decrease in inositol phosphate formation in response to fetal calf serum stimulation. The two PKC activators, the diacylglycerol analogue 1,2, dioctanoyl-sn-glycerol (DOG) and the phorbol ester 12-O-tetra-decanoyl phorbol 13-acetate (TPA), increased cell proliferation in a dose-dependent manner, as did the calcium ionophore, ionomycin. However, co-stimulation with either ionomycin and DOG or ionomycin and TPA resulted in a reduced number of cells. The PKC inhibitor, bisindolylmaleimide II (Bis II), significantly decreased the number of ES cells, mainly due to increased apoptosis. The possible feedback effect of PKC on PLC was examined by preincubating ES cells with either the PKC inhibitor Bis II or the activator TPA before stimulation of inositol phosphate production with fetal calf serum; preincubation with Bis II increased inositol phosphate formation whereas preincubation with TPA decreased inositol formation. These results indicate that the Ptdins system is involved in the control of ES-cell proliferation and apoptosis.