Previous studies provided indirect evidence for a role for protein kinase C (PKC) in ATP stimulation of surfactant secretion. The present study demonstrates that ATP increases PKC activity in the membrane fraction and decreases PKC activity in the cytosol fraction of alveolar type II cells, indicating translocation of PKC to the membranes. The kinetics of ATP concentration dependence of increases in phosphatidylcholine secretion and diacylglycerol content were similar, suggesting direct correlation between these two parameters. ATP also increased membrane PKC activity in a concentration-dependent manner. Almost one-half of the PKC activity in the cytosol and membrane fractions was Ca2+ independent. The ATP-induced increase was greater in membrane-associated Ca(2+)-dependent enzyme (233%) than in Ca(2+)-independent enzyme (121%). Desensitization of PKC by exposure of cells to phorbol esters decreased PKC activity in the membrane and cytosol fractions. In cells pretreated for 3 h with phorbol esters, PKC activity was near minimum, and ATP-stimulated secretion was lowest (< 40% of that observed in untreated cells). These results indicate that a major part of ATP-stimulated surfactant secretion in type II cells is mediated via activation of PKC.