We have characterized effects of phorbol, 12-myristate 13 acetate (PMA) on growth and differentiation in a nullipotent embryonal carcinoma (EC) cell line, F9, in a pluripotent EC line, P19, and in the differentiated derivatives of these cells, In P19EC and F9EC PMA addition resulted in inhibition of growth, while in the differentiated derivates PMA was mitogenic. PMA did not induce differentiation in EC cells but potentiated the retinoic acid (RA) induced differentiation in P19EC, although, not in F9EC. Rapid morphological changes by PMA were seen in P19EC and two differentiated derivatives which represent different stages of differentiation. In F9 no rapid morphological changes were induced by PMA. Using [3H]phorbol dibutyrate as a ligand we showed that during differentiation into endoderm-like cells the number of phorbol ester receptors increases, while in epithelial-like derivatives no increase is found. In differentiated cells with an increased number of phorbol ester receptors, the cytoplasmic Ca2+- and phospholipid-dependent protein kinase (the putative receptor for phorbol esters) activity was also increased. Only in those derivatives where the number of phorbol ester receptors is increased, is the binding of epidermal growth factor (EGF) inhibited by PMA. These results suggest a relationship between levels of expression of phorbol ester receptors, cytoplasmic protein kinase C and biological effects, namely rapid morphological changes, altered growth, potentiation of RA induced differentiation, and inhibition of EGF binding.