The phorbol ester TPA (12-O-tetradecanoylphorbol-13-acetate) stimulates baseline Na+ transport across frog skin epithelium and partially inhibits the natriferic response to vasopressin. The effects are produced largely or solely when TPA is added to the mucosal surface of the tissue. Although TPA activates protein kinase C, it has other effects, as well. Thus, the biochemical basis for the effects and the ionic events involved have been unclear. Furthermore, the physiologic implications have been obscure because of the sidedness of TPA's actions. We now report that two synthetic diacylglycerols (DAG) replicate the stimulatory and inhibitory effects of TPA on frog skin. DAG is the physiologic activator of PKC. In this tissue, it produces half-maximal stimulation at a concentration of less than or equal to 19 microM. In contrast to TPA, DAG is about equally effective from either tissue surface. In a series of eight experiments, DAG was found to depolarize the apical membrane. Diacylglycerol also increases the paracellular conductance of frog skins bathed with mucosal Cl- Ringer's solution. The latter effect can be minimized by replacing NO3- for Cl- in the mucosal solution. Under these conditions, combined intracellular and transepithelial measurements indicated that DAG increased both the apical Na+ permeability and intracellular Na+ concentration. These results are qualitatively similar to the effects of cyclic 3',5'-AMP on this tissue, suggesting that activation of PKC by DAG causes phosphorylation of the same or nearby gating sites phosphorylated by cAMP. We propose that apical Na+ entry is regulated in part by activation of PKC, and that insulin may be a physiologic trigger of this activation.