The overexpression of protein kinase C-delta (PKC-delta), but not PKC-epsilon, enables the mouse myeloid cell line 32D to differentiate into macrophages when treated with phorbol esters such as 12-O-tetradecanoylphorbol-13-acetate (TPA). To determine the domain of PKC-delta that is responsible for this isotype-specific function, cDNAs that encode reciprocal chimeras of PKC-delta and -epsilon (PKC-delta epsilon and PKC-epsilon delta) were constructed by exchanging regulatory and kinase domains using polymerase chain reaction technology. Both chimeras were stably expressed in 32D cells using the pLTR expression vector and displayed protein kinase activity upon TPA treatment. TPA treatment of L epsilon delta, cells that overexpressed the PKC-epsilon delta chimera, induced a dramatically increased cell volume, surface adherence, surface expression of Mac-1 and Mac-3, lysozyme production, and phagocytosis. These are the characteristics of the macrophage phenotype found in TPA-treated 32D cells that overexpressed PKC-delta. In contrast, little effect was seen in L delta epsilon, 32D cells that overexpressed PKC-delta epsilon, with or without TPA treatment. A PKC inhibitor directed toward the catalytic domain of PKC, GF109203X, and a selective inhibitor of PKC-delta, Rottlerin, blocked the TPA-induced differentiation of PKC-epsilon delta-overexpressing 32D cells. These results demonstrate that the catalytic domain of PKC-delta contains the primary determinants for its activity in phorbol ester-induced macrophage differentiation.