We have reported previously that TSH and insulin-like growth factor-I (IGF-I) synergistically stimulate DNA synthesis and elevate the 1,2-diacylglycerol (1,2-DG) content of FRTL-5 thyroid cells and have suggested that protein kinase-C (PKC) may mediate the growth-promoting effects of these hormones. We now present evidence that the effects of TSH on 1,2-DG content are associated with commensurate changes in PKC activity. We measured 1,2-DG content and PKC activity in TSH-deprived growth-arrested cells when TSH was readded. Cells were maintained in medium containing a high dose of insulin (which interacts with IGF-I receptors) and no TSH. When cells incubated in the absence of TSH were reexposed to TSH for 24 h, the 1,2-DG content increased to 234 +/- 22% of the control value, and the ratio of PKC activity in membrane and cytosol fractions of cell homogenates, an index of the state of activation of PKC in situ, increased to 323 +/- 42% of the control value. In cells growing under the influence of TSH in medium containing a high dose of insulin, we found that PKC activity varied during growth. Total cellular PKC activity (3.2 +/- 0.1 nmol/min.micrograms DNA) and the ratio of membrane/cytosol PKC activity (0.24 +/- 0.002) were high during exponential proliferation and fell progressively to 1.1 +/- 0.08 nmol/min.micrograms DNA and 0.12 and fell progressively to 1.1 +/- 0.08 nmol/min.micrograms DNA and 0.12 +/- 0.01, respectively, as cells attained confluence. The specific activity of membrane-associated PKC was 3.0 +/- 0.37 nmol/mg.min in early exponential growth and declined to 0.72 +/- 0.14 nmol/mg.min as cell proliferation ceased. The 1,2-DG content also varied during growth, with a peak occurring during exponential growth, followed by a decline as cells attained a confluent state. These data are consistent with the hypothesis that the growth-promoting effects of TSH in FRTL-5 cells are mediated, at least in part, by 1,2-DG activation of PKC. Since we have demonstrated previously that the effect of TSH to elevate 1,2-DG is, in turn, mediated by cAMP, this represents a special example of the interaction of these two signal transduction systems in regulation of cell proliferation.