After its formation by phospholipase C–catalyzed hydrolysis of PI(4,5)P₂, the hydrophobic DAG (see Figure 15-34a) remains associated with the plasma membrane. The principal function of DAG is to activate a family of protein kinases collectively termed protein kinase C (PKC). In the absence of hormone stimulation, protein kinase C is present as a soluble cytosolic protein that is catalytically inactive. A rise in the cytosolic Ca²⁺ level causes protein kinase C to translocate to the cytosolic leaflet of the plasma membrane, where it can interact with membrane-associated DAG (see Figure 15-34a, steps 5 and 6). Activation of PKC thus depends on an increase of both Ca²⁺ ions and DAG, suggesting an interaction between the two branches of the IP₃/DAG pathway.

The activation of PKC in different cells results in a varied array of cellular responses, indicating that it plays a key role in many aspects of cellular growth and metabolism. In many cells, PKC phosphorylates transcription factors that are localized in the cytosol, triggering their movement into the nucleus, where they activate genes necessary for cell division. In liver cells, PKC helps regulate glycogen metabolism by phosphorylating and so inhibiting glycogen synthase, as we will see next.