The effect of the tumor-promoting agent phorbol 12-myristate 13-acetate (PMA) on insulin receptors and insulin action was studied in rat hepatoma cells in culture. PMA (0.1-1.0 micrograms/ml) did not affect insulin binding either acutely or chronically but inhibited insulin stimulation of glycogen synthase and tyrosine aminotransferase. PMA (1 microgram/ml) stimulated the phosphorylation of the beta subunit of insulin receptor purified from [32P]phosphate-labeled Fao cells by 1.3-fold in the absence of insulin. In contrast, insulin-stimulated phosphorylation in the presence of PMA was reduced. Phosphoamino acid analysis of the beta subunit after PMA stimulation revealed an increase of both phosphoserine and phosphothreonine residues, whereas insulin stimulated primarily phosphorylation of tyrosine and serine residues. Insulin stimulation of cells after PMA treatment revealed a decrease in phosphotyrosine when compared to cells stimulated by insulin alone. Tryptic peptide mapping of the beta subunit by a two-dimensional chromatographic/electrophoretic separation revealed nine phosphopeptides from the cells treated with PMA. Insulin stimulated phosphorylation at six new sites in the receptor, three of which appeared to be similar to those in PMA-treated cells. This report shows that phorbol esters stimulate insulin receptor phosphorylation, inhibit insulin-induced receptor phosphorylation and insulin action, and suggest a physiologic relation between insulin action and the calcium-activated and phospholipid-dependent protein kinase C.