We have studied the effects of vasopressin and tetradecanoyl phorbol acetate (TPA) on cytosolic free Ca2+ ([Ca2+]i) and insulin release in HIT-T15 β-cells. Saturable binding of [3H] [Arg8]-vasopressin to HIT cell microsomes indicated a single class of receptors with a dissociation constant (K d) of 2.5 nm and a total number of binding sites (Bmax) equal to 120 fmol/mg protein. [Arg8]-vasopressin (0.1–100 nm) elicited dose-dependent insulin release from HIT cells by up to 25-fold. This increase was dependent on the presence of extracellular glucose and was blocked by omission of extracellular Ca2+ or addition of verapamil. The stimulation was biphasic; a rapid but short-lived large increase in release was followed by a smaller sustained rise. Vasopressin also evoked a marked, concentration-dependent increase in [Ca2+]i which was also biphasic; an initial spike was followed by a sustained elevation. This increase also required glucose and was blocked by the absence of extracellular Ca2+ or the addition of verapamil. Pretreatment of the cells with TPA overnight to deplete protein kinase C activity did not affect the [Ca2+]i or insulin responses to vasopressin. However, short-term exposure to TPA markedly reduced glucose-induced steady-state [Ca2+]i, despite potentiating glucose-stimulated insulin release sevenfold, and blocked the [Ca2+]i increase induced by vasopressin. These inhibitory effects of TPA were absent in protein kinase C-depleted cells and were prevented by staurosporine. TPA had no significant effect on vasopressin-induced insulin release. Vasopressin did not modify the activity of ATP-sensitive K+ channels. These data indicate that vasopressin-induced insulin release is associated with a large increase in [Ca2+]i via increased Ca2+ entry and that this signal is markedly reduced by protein kinase C activation. Thus, protein kinase C does not have a direct role in vasopressin-induced insulin release. Simultaneous addition of vasopressin and TPA promotes insulin release, possibly through increased sensitivity of the secretory system to Ca2+ on activation of protein kinase C by TPA.