Colonic carcinogenesis is accompanied by abnormalities in multiple signal transduction components, including alterations in protein kinase C (PKC). The expression level of PKC-zeta, an atypical PKC isoform, increases from the crypt base to the luminal surface and parallels crypt cell differentiation in normal colon. In prior studies in the azoxymethane model of colon cancer, we showed that PKC-zeta was down-regulated in rat colonic tumors. In this study, we showed that PKC-zeta is expressed predominantly in colonic epithelial and not stromal cells, and loss of PKC-zeta occurs as early as the adenoma stage in human colonic carcinogenesis. To assess the regulation of growth and differentiation by PKC-zeta, we altered this isoform in human Caco-2 colon cancer cells using stable constitutive or inducible expression vectors, specific peptide inhibitors or small interfering RNA. In ecdysone-regulated transfectants grown on collagen I, ponasterone A significantly induced PKC-zeta expression to 135% of empty vector cells, but did not alter nontargeted PKC isoforms. This up-regulation was accompanied by a 2-fold increase in basal and 4-fold increase in insulin-stimulated PKC-zeta biochemical activity. Furthermore, PKC-zeta up-regulation caused >50% inhibition of cell proliferation on collagen I (P < 0.05). Increased PKC-zeta also significantly enhanced Caco-2 cell differentiation, nearly doubling alkaline phosphatase activity, while inducing a 3-fold increase in the rate of apoptosis (P < 0.05). In contrast, knockdown of this isoform by small interfering RNA or kinase inhibition by myristoylated pseudosubstrate significantly and dose-dependently increased Caco-2 cell growth on collagen I. In transformation assays, constitutively up-regulated wild-type PKC-zeta significantly inhibited Caco-2 cell growth in soft agar, whereas a kinase-dead mutant caused a 3-fold increase in soft agar growth (P < 0.05). Taken together, these studies indicate that PKC-zeta inhibits colon cancer cell growth and enhances differentiation and apoptosis, while inhibiting the transformed phenotype of these cells. The observed down-regulation of this growth-suppressing PKC isoform in colonic carcinogenesis would be predicted to contribute to tumorigenesis.