Granulocyte-macrophage colony stimulating factor (GM-CSF) stimulates the growth and differentiation of human hematopoietic progenitor cells by activating transcription of specific genes. The mechanism by which binding of GM-CSF to its receptor stimulates gene expression remains unknown. To examine this process in more detail, we have transfected human monocytic leukemia cells U937 with a plasmid containing an AP-1 enhancer element and a chloramphenicol acetyltransferase recorder gene and treated them with GM-CSF. We find that GM-CSF stimulates a 2-3-fold increase in chloramphenicol acetyltransferase activity over a concentration range 1-1,000 units/ml. Northern and Western blot analysis demonstrates that the mechanism by which GM-CSF stimulates AP-1 enhancer activity involves increases in c-jun and c-fos mRNA levels, and increases in Jun protein. In a similar fashion the treatment of normal human monocytes with GM-CSF also induced increases in total cellular c-jun. Because protein kinase C plays a crucial role in activating c-jun transcription we examined the role of this enzyme in mediating the effects of GM-CSF. Treatment of U937 cells with inhibitors of protein kinase C including staurosporine 10 nM and H-7 50 μM, or down-regulation of protein kinase C by phorbol ester pretreatment blocks the induction of c-jun by GM-CSF. However, HA which does not block protein kinase C had no effect on GM-CSF stimulation of c-jun RNA levels. In addition, GM-CSF treatment causes the rapid translocation of protein kinase C to the particulate fraction which was maximal by 5 min and returned to base line by 80 min. These data suggest that the binding of GM-CSF to its receptor stimulates increases in c-jun mRNA and protein and activates AP-1 enhancer activity. These effects may be at least in part mediated by activation of protein kinase C.