Constitutive secretion of heparan sulphate proteoglycans (HSPGs) was stimulated in human hepatoma HepG2 cells by phorbol 12-myristate 13-acetate (PMA) and inhibited by calphostin C, a specific inhibitor of protein kinase C (PKC). To delineate more closely the site of PKC action, the packaging in vitro of 35SO4-labelled HSPGs into transport vesicles was investigated. Formation of transport vesicles at the trans-Golgi network was stimulated by PMA and inhibited by calphostin C or Ro 31-8220 by using a post-nuclear supernatant. Treatment of either isolated Golgi-enriched membranes or cytosolic proteins with calphostin C provided evidence that membrane-bound PKC forms strongly supported vesicle formation, whereas cytosolic PKC forms showed a marginal effect. The PKC isoforms PKC-alpha and PKC-zeta were attached to highly purified Golgi membranes, as shown by Western blotting. Both isoforms were localized by confocal immunofluorescence microscopy in the Golgi area of HepG2 cells. Immunoelectron microscopy of ultrathin cryosections of HepG2 cells showed that PKC-zeta predominantly attaches to the trans-Golgi region, whereas PKC-alpha binds to the cis- and trans-Golgi area.