A cardiomyopathy that is characterized by an impairment in diastolic relaxation and a loss of calcium sensitivity of the isolated myofibril has been described in chronic diabetic animals and humans. To explore a possible role for protein kinase C (PKC)-mediated phosphorylation of myofibrillar proteins in this process, we characterized the subcellular distribution of the major PKC isoforms seen in the adult heart in cardiocytes isolated from diabetic rats and determined patterns of phosphorylation of the major regulatory proteins, including troponin I (TnI). Rats were made diabetic with a single injection of streptozotocin, and myocardiocytes were isolated and studied 3 to 4 weeks later. In nondiabetic animals, 76% of the PKC epsilon isoform was located in the cytosol and 24% was particulate, whereas in diabetic animals, 55% was cytosolic and 45% was particulate (P < .05). PKC delta, the other major PKC isoform seen in adult cardiocytes, did not show a change in subcellular localization. In parallel, TnI phosphorylation was increased 5-fold in cardiocytes isolated from the hearts of diabetic animals relative to control animals (P < .01). The change in PKC epsilon distribution and in TnI phosphorylation in diabetic animals was completely prevented by rendering the animals euglycemic with insulin or by concomitant treatment with a specific angiotensin II type-1 receptor (AT1) antagonist. Since PKC phosphorylation of TnI has been associated with a loss of calcium sensitivity of intact myofibrils, these data suggest that angiotensin II receptor-mediated activation of PKC may play a role in the contractile dysfunction seen in chronic diabetes.