Protein kinase C (PKC) is a family of multifunctional isoenzymes, activated by diacylglycerols (DAGs), which play a central role in signal transduction and intracellular crosstalk by phosphorylating at serine/threonine residues an array of substrates, including cell-surface receptors, enzymes, contractile proteins, transcription factors and other kinases. Individual isozymes vary in their pattern of tissue and subcellular distribution, function and Ca²⁺/phospholipid cofactor requirements, and in diabetes there is widespread activation of the DAG-PKC pathway in metabolic, cardiovascular and renal tissues. In liver, muscle and adipose tissue, PKC isozymes have been implicated both as mediators and inhibitors of insulin action. Activation of DAG-sensitive PKC isoforms, such as PKC-θ and PKC-ɛ, down-regulates insulin receptor signalling and could be an important biochemical mechanism linking dysregulated lipid metabolism and insulin resistance in muscle. On the other hand, atypical PKC isozymes, such as PKC-ζ and PKC-λ, have been identified as downstream targets of PI-3-kinase involved in insulin-stimulated glucose uptake, especially in adipocytes. Glucose-induced de novo synthesis of (palmitate-rich) DAG and sustained isozyme-selective PKC activation (especially but not exclusively PKC-β) has been strongly implicated in the pathogenesis of diabetic microangiopathy and macroangiopathy through a host of undesirable effects on endothelial function, VSM contractility and growth, angiogenesis, gene transcription (in part by MAP-kinase activation) and vascular permeability. Interventions that increase DAG metabolism (e. g. vitamin E) and/or inhibit PKC isozymes (e. g. the β-selective inhibitor LY333 531) ameliorate the biochemical and functional consequences of DAG-PKC activation in experimental diabetes, for example improving retinal blood flow and albuminuria in parallel with reductions in membrane-associated PKC isozyme activities. Thus, a greater understanding of the functional diversity and pathophysiological regulation of PKC isozymes is likely to have important clinical and therapeutic benefits. [Diabetologia (2001) 44: 659–673]