The regulation of protein phosphorylation by sphingosine in A431 human epidermoid carcinoma cells was examined. Sphingosine is a competitive inhibitor of phorbol ester binding to protein kinase C (Ca2+/phospholipid-dependent enzyme) and potently inhibits phosphotransferase activity in vitro. Addition of sphingosine to intact A431 cells caused an inhibition of the phorbol ester-stimulated phosphorylation of two protein kinase C substrates, epidermal growth factor (EGF) receptor threonine 654 and transferrin receptor serine 24. We conclude that sphingosine inhibits the activity of protein kinase C in intact A431 cells. However, further experiments demonstrated that sphingosine-treatment of A431 cells resulted in the regulation of the EGF receptor by a mechanism that was independent of protein kinase C. First, sphingosine caused an increase in the threonine phosphorylation of the EGF receptor on a unique tryptic peptide. Second, sphingosine caused an increase in the affinity of the EGF receptor in A431 and in Chinese hamster ovary cells expressing wild-type (Thr654) and mutated (Ala654) EGF receptors. Sphingosine was also observed to cause an increase in the number of EGF-binding sites expressed at the surface of A431 cells. Examination of the time course of sphingosine action demonstrated that the effects on EGF binding were rapid (maximal at 2 mins) and were observed prior to the stimulation of receptor phosphorylation (maximal at 20 mins). We conclude that sphingosine is a potently bioactive molecule that modulates cellular functions by: 1) inhibiting protein kinase C; 2) stimulating a protein kinase C-independent pathway of protein phosphorylation; and 3) increasing the affinity and number of cell surface EGF receptors.