It has recently been proposed that degradation products of sphingolipids may serve as physiologic inhibitors of protein kinase C. The present study was performed to determine the effect of 1,2-diacylglycerols and phorbol esters, known activators of protein kinase C, on sphingomyelin metabolism. 1,2-Dioctanoylglycerol (diC8) caused time- and concentration-dependent reduction in the level of sphingomyelin labeled to equilibrium with [3H]choline. diC8 (200 micrograms/ml) reduced [3H]sphingomyelin to 81 +/- 3% of control (p less than 0.005) by 15 min, and the level was 58 +/- 5% of control after 1 h; an EC50 for this event was 56 micrograms/ml. To evaluate the mechanisms of stimulated hydrolysis, the sphingoid base backbone of sphingomyelin was labeled with [14C] serine, and the effects of diC8 were quantitated. diC8 (100 micrograms/ml) reduced the level of sphingomyelin to 66 +/- 7% of control by 1 h from 375 +/- 12 pmol/10(6) cells to 245 +/- 26 pmol/10(6) cells. There was a concomitant increase in ceramide from 89 +/- 4 pmol/10(6) cells to 252 +/- 27 pmol/10(6) cells consistent with activation of the enzyme, sphingomyelinase (EC 3.1.4.12). In support of this contention, 1,2-diacylglycerols appeared to enhance the activity of an acid, but not a neutral, sphingomyelinase in homogenates of GH3 cells. The 1,2-diacylglycerol, 1-oleyl-2-acetylglycerol, produced similar effects. In contrast, the phorbol esters, 12-O-tetradecanoylphorbol 13-acetate and phorbol 12,13-dibutyrate, failed to stimulate sphingomyelin hydrolysis. Further, these effects of the 1,2-diacylglycerols occurred in cells down-modulated for protein kinase C. These studies demonstrate that 1,2-diacylglycerols stimulate sphingomyelin hydrolysis by a mechanism independent of the protein kinase C which mediates phorbol ester action. This is the first report of stimulated sphingomyelin hydrolysis by a physiologic effector molecule.