During mouse preimplantation development, the cells of the mouse embryo undergo a progressive subcellular reorganization at compaction, which eventually results in the formation of two distinct cell types. We have investigated the effect that activators of the Ca²⁺-phospholipid-dependent protein kinase (PKC) have on mouse compaction. Phorbol ester activation of PKC caused premature compaction of four-cell embryos within a few minutes of addition followed by a prolonged decompaction phase after 1 hr. This response was dose-dependent to concentrations as low as 250 pg/ml. Diacylglycerides also caused compaction; however, it was more sustained than with phorbol esters and was not followed by a phase of decompaction. Inhibition of PKC with sphingosine blocks induced compaction in a dose-dependent manner and also blocks normal compaction of eight-cell embryos. A monoclonal antibody to the cell adhesion molecule, E-cadherin, which mediates mouse embryo compaction, completely blocks compaction induced by these activators of PKC. Indirect immunofluorescence with a monoclonal antibody to E-cadherin indicates that PKC activation causes a rapid shift in the localization of this cell adhesion molecule, which coincides with the observed compaction. These results suggest that PKC plays a role in the initiation of compaction through its effect either directly or indirectly on E-cadherin.