Human amnion cells synthesize and release prostaglandin E2 in response to epidermal growth factor. The protein kinase C activator, phorbol 12-myristate, 13-acetate also stimulates amnion cell prostaglandin E2 synthesis. We used a human amnion cell line (WISH) to conduct in vitro experiments to investigate a potential role of protein kinase C in the signal transduction pathway leading to epidermal growth factor-induced prostaglandin E2 production. Pretreatment of cultured amnion cells with a low, nonstimulating dose of phorbol 12-myristate, 13-acetate potentiated the action of epidermal growth factor in causing prostaglandin E2 production as measured by radioimmunoassay. The protein kinase C-selective inhibitor staurosporine inhibited epidermal growth factor-induced prostaglandin E2 production, further suggesting a role for protein kinase C in epidermal growth factor action. Experiments were conducted in which amnion cells were rendered protein kinase C-deficient by chronic exposure to phorbol ester, which has been shown to down-regulate the enzyme. In these cells, epidermal growth factor caused prostaglandin E2 synthesis at levels comparable to native (non-protein kinase C-deficient) cells. We conclude that protein kinase C plays a more modulatory than direct role in the epidermal growth factor signal transduction cascade that leads to prostaglandin E2 production by amnion cells. We propose a bifurcating transduction scheme in which, under conditions of protein kinase C inactivation, epidermal growth factor alone causes prostaglandin E2 synthesis. When protein kinase C is activated by as yet unknown endogenous substances, the epidermal growth factor responsiveness of the amnion cells is greatly enhanced. This pathway could have important implications in a feed-forward mechanism regulating the level of prostaglandin E2 production during the onset of labor.