An endogenous protein which inhibits protein kinase C (PKC)-mediated effects has been detected in rat heart ventricular tissue. This functional PKC-inhibitory activity was completely abolished by okadaic acid, making it possible to measure PKC activity in non-purified cell fractions. This suggests that the PKC-inhibitory activity is a type 1 or 2A serine/threonine phosphatase. Confirming this, membrane and cytosolic PKC-inhibitory preparations were found to contain phosphatase activity which was suppressed by okadaic acid, exhibiting an IC50 (concn. required for 50% inhibition) of 1.5-2 nM. Furthermore, okadaic acid stimulated prostacyclin production in rat cardiomyocytes and aortic smooth-muscle cells and, like the PKC activator phorbol 12-myristate 13-acetate, it augmented the prostacyclin formation induced by the Ca2+ ionophore A23187. Our results strongly suggest that the endogenous PKC 'inhibitor' is the cellular phosphatase 2A, which plays an important role in regulating the phosphorylation level of PKC target proteins.