Phospholipase C (PLC)-mediated hydrolysis of membrane phospholipids results in the production of diacylglycerol, inositol phosphates, and choline metabolites. Inositol triphosphate increases calcium levels, while diacylglycerol activates protein kinase C. The present studies demonstrate that exogenous PLC generates inositol phosphates, releases choline metabolites, and activates protein kinase C in human HL-60 promyelocytic leukemia cells. PLC also induced monocytic differentiation of HL-60 cells as manifested by adherence, growth inhibition, and appearance of monocytic cell surface antigens. Furthermore, PLC treatment decreased c-myc mRNA levels and induced c-fos, c-fms, and tumor necrosis factor transcripts. The changes in gene expression induced by PLC are similar to those previously shown to be associated with phorbol ester-induced monocytic differentiation of HL-60 cells. Our results thus demonstrate that exogenous PLC activates HL-60 cell protein kinase C and that this effect is associated with induction of monocytic differentiation. PLC may therefore play a role in transducing signals from physiological inducers of monocytic differentiation.