This report describes the inhibition of protein kinase C (PKC) by a synthetic peptide corresponding to a viral sequence expressed in mammalian cells. The peptide corresponds to cytoplasmic domain residues 828-848 of the human immunodeficiency virus type 1 (HIV-1) envelope glycoprotein (gp41), and it inhibits Ca(2+)- and phosphatidylserine (PS)-dependent phosphorylation of synthetic peptide substrates and histone by purified PKC with IC50 values ranging from 9 to 32 microM. Although previously described pKC-inhibitory synthetic peptides corresponding to sequences expressed in mammalian cells are also effective against the phosphorylation of synthetic peptide substrates, they fail to affect PKC-catalysed phosphorylation of potent protein substrates such as histone. This may limit their usefulness as inhibitors of PKC-catalysed protein phosphorylation in cellular systems. PKC activation is a major contributing factor in multidrug resistance (MDR) in cancer. Our observation that the synthetic peptide gp41(828-848) inhibits pKC-catalysed phosphorylation of a protein substrate suggests the potential value of expressing the viral sequence gp41(828-848) in cancer cells as a novel in vitro model system of MDR reversal.