The secreted form of beta-amyloid precursor protein (sAPP) has been reported to exert various biological activities in cultured neurons. The signal transduction mechanisms underlying these physiological functions of sAPP remain unclear. We now report that treatment of neural cells with the secreted form of APP695 (sAPP695) leads to dose- and time-dependent increase in phosphorylation of the endogenous substrates with a molecular mass of 80, 57 and 43 kDa. Pretreatment of cells with protein kinase C (PKC) inhibitor H-7 reduced phosphorylation of the 80- and 43-kDa proteins in a dose-dependent manner. The effect of sAPP695 on the phosphorylation is mimicked by phorbol 12-myristate-13-acetate (PMA). Downregulation of PKC by prolonged treatment of cells with PMA abolished sAPP695-enhanced phosphorylation of the 80- and 43-kDa proteins, indicating PKC is involved in the sAPP695-enhanced phosphorylation of these proteins in the cells. We also suggest that the 80- and 43-kDa proteins phosphorylated by sAPP695-stimulation are the major PKC substrates myristoylated alanine-rich C-kinase substrate and growth-associated protein-43. Furthermore, we demonstrate that tyrosine phosphorylation of phospholipase Cgamma1 and formation of inositol 1,4,5-trisphosphate were increased by sAPP695-stimulation. These observations suggest that sAPP695 induces the activation of the signaling pathways through a stimulation of phosphoinositide-PKC cascade.