The effects of neurotransmitters and peptides on phosphoinositide hydrolysis were studied by measuring [3H]inositol monophosphate ([3H]IP) and protein kinase C (PKC) activity in the sympathetic and sensory neuronal cultures of the chick embryo. [3H]IP was increased in sympathetic neurons by acetylcholine (ACh), muscarine, serotonin (5-HT), and vasoactive intestinal polypeptide. ACh, muscarine, 5-HT, and bradykinin increased [3H]IP in sensory neuronal cultures. Dopamine, norepinephrine, histamine, and nerve growth factor did not stimulate [3H]IP formation in both cultures. ACh and phorbol 12,13-dibutyrate (PDB) increased the PKC activity by two- to sevenfold in the particulate fraction of both cultures. In sympathetic neurons, PKC activity was increased in the particulate fraction; activity in the cytosolic fraction was not affected. There was a 50% decline in the protein kinase C activity of the cytosolic fraction after PDB and ACh treatment of sensory cultures. The decline in PKC activity in the cytosolic fraction was attributed to the presence of nonneuronal cells in sensory cultures. To confirm this, the enzyme activity was determined in tissues that contain a heterogeneous population of cells. PDB activated PKC in the adrenal medulla and the brain of the rat. In both tissues there was a 65% decline in the PKC activity of the cytosolic fraction and about a 75% increase in the particulate fraction. We conclude that the mechanism of activation of protein kinase C in pure cultures of sympathetic neurons is different than in tissues containing a mixed population of neurons and nonneuronal cells.