Protein Kinase C functions in the signal transduction system involving sn-1,2-diacylglycerol (DAG). DAG stimulates membrane-bound protein kinase C, which requires calcium ion for its activity (hence the "C" designation) and a phospholipid (specifically, phosphatidylserine).

DAG, stimulates the activity of protein kinase C by greatly increasing the affinity the enzyme's affinity for calcium ions. The requirement is specific for the sn-1,2-DAG; neither the 1,3- nor the 2,3-isomer is active.

After activation, protein kinase C phosphorylates specific serine and threonine residues in target proteins. As with cAMP-stimulated protein kinase, the specific cellular responses to protein kinase C activation depend on the ensemble of target proteins that become phosphorylated in a given cell. Known target proteins include calmodulin, the insulin receptor, -adrenergic receptor, glucose transporter, HMG-CoA reductase, cytochrome P-450, and tyrosine hydroxylase.