To determine if muscarinic receptor-activation plays a role in oligodendrocyte development, the effect of carbachol a stable acetylcholine analog, on gene expression and proliferation was investigated. Using Northern blot analysis we showed that carbachol caused a time and concentration-dependent increase in c-fos mRNA. This effect was blocked by atropine, a non-selective muscarinic antagonist. In addition, the muscarinic-stimulated c-fos increase was inhibited by 1-(5-isoquinoline-sulfonyl)-2-methylpiperazine (H-7), a potent inhibitor of protein kinase C (PKC), but not by N-2-(p-bromocinnamylamino)-ethyl-5-isoquinoline-sulfonamide (H-89), a potent inhibitor of protein kinase A, suggesting the involvement of PKC in mediating the response. Down-regulation of PKC by overnight pre-treatment with 12-O-tetradecanoylphorbol 13-acetate (TPA) blocked only the phorbol ester-stimulated c-fos accumulation while no effect was observed in the carbachol-induced response. These results suggested that carbachol stimulated an H-7 sensitive PKC pathway which may be different than that activated by TPA. Further evidence for two separate mechanisms of proto-oncogene induction was provided by the additive effect of carbachol and TPA. Induction of c-fos mRNA by carbachol was dependent on both influx of extracellular Ca2+ and release from intracellular stores, as both EDTA and BAPTA blocked the response. Since activation of muscarinic receptors can affect cell division in other cellular systems, the effect of carbachol on [3H]thymidine and bromodeoxyuridine incorporation into oligodendrocyte DNA was measured. Carbachol stimulated DNA synthesis in oligodendrocyte progenitors. This effect was mediated by muscarinic receptors as [3H]thymidine incorporation was prevented or significantly reduced by the addition of atropine. In conclusion, the present findings suggest that, the neurotransmitter, acetylcholine may act as a trophic factor in developing oligodendrocytes, regulating their growth and development in the central nervous system.