Palmitoylcarnitine, a reported protein kinase C inhibitor, enhanced the phorbol ester dependency of the enzyme, augmenting protein kinase C activity in the presence of phorbol esters such as phorbol 12,13-dibutyrate while inhibiting the basal activity measured in the presence of calcium plus phosphatidylserine. Weakly potent phorbol esters such as phorbol 12,13-diacetate and 4-O-methylphorbol 12-myristate 13-acetate were full agonists like phorbol 12,13-dibutyrate for activation of protein kinase C in the presence of palmitoylcarnitine. On the other hand, 1,2-diacylglycerols such as 1,2-diolein were only partially stimulatory. Palmitoylcarnitine did not interfere with the association of protein kinase C with phosphatidylserine, suggesting that its action was on protein kinase C activation per se rather than on priming. A long fatty acid ester, quaternary amine, and anionic charge were needed for the palmitoylcarnitine-like action. Phosphatidylcholine, which possesses these features, partially mimicked the action of palmitoylcarnitine. Palmitoylcarnitine thus appears to be a lipophilic modulator of protein kinase C rather than a simple inhibitor. The results raise the possibility that differences in response between phorbol esters and diacylglycerols may reflect differential ability to activate protein kinase C in the appropriate lipid environment rather than the existence of unique targets for one or the other compound.