Lipophosphoglycan (LPG), the predominant molecule on the surface of the parasite Leishmania donovani, has previously been shown to be a potent inhibitor of protein kinase C (PKC) isolated from rat brain. The mechanism by which LPG inhibits PKC was further investigated in this study. LPG was found to inhibit the PKC alpha-catalyzed phosphorylation of histone in assays using large unilamellar vesicles composed of 1-palmitoyl, 2-oleoyl phosphatidylserine and 1-palmitoyl, 2-oleoyl phosphatidylcholine either with or without 1% 1,2 diolein added. The results also indicated that while PKC binding to sucrose-loaded vesicles was not substantially reduced in the presence of LPG at concentrations of 1-2%, the activity of membrane-bound PKC was inhibited by 70%. This inhibition of the membrane-bound form of PKC is not a consequence of reduced substrate availability to the membrane. However, Km shifted from approximately 31 +/- 4 microM to 105 +/- 26 microM in the presence of 5% LPG. LPG caused PKC to bind to membranes without inducing a conformational change as revealed by the lack of an increased susceptibility to trypsin. An LPG fragment containing only one repeating disaccharide unit was not as effective as the entire LPG molecule or of larger fragments in inhibiting the membrane-bound form of the enzyme. The shorter fragments were also less potent in raising the bilayer to hexagonal phase transition temperature of a model membrane. LPG is also able to inhibit the membrane-bound form of PKC alpha from the inner monolayer of large unilamellar vesicles, the opposite monolayer to which the enzyme binds in our assay. Inhibition is likely a result of alterations in the physical properties of the membrane. To our knowledge, this is the first example of a membrane additive that can inhibit the membrane-bound form of PKC in the presence of other lipid cofactors.