Protein kinase C signaling pathways have been implicated in the disruption of intercellular junctions, but mechanisms are not clear. p100 and p120 are members of the Armadillo family of proteins and are localized to cellular adherens junctions. In strain I Madin-Darby canine kidney cells, protein kinase C activation leads to disruption of tight junctions and an increase in permeability of cell monolayers. We show that this permeability increase is accompanied by dephosphorylation of p100/p120 on serine and threonine residues. The dephosphorylation of these proteins can also be induced by the kinase inhibitors staurosporine, KT5926, and Gö 6976. Treatment of cells with phosphatase inhibitors induced hyperphosphorylation of p100 and p120. Thus, p100 and p120 participate in a regulatable cycle of serine/threonine phosphorylation and dephosphorylation. Protein kinase C must act, directly or indirectly, by perturbing this phosphorylation cycle, by inhibition of a p100/p120 kinase and/or activation of a phosphatase. These data clearly show that p100 and p120 are targets of a novel protein kinase C signaling pathway. Dephosphorylation of these proteins precedes the permeability increase across epithelial cell monolayers seen in response to phorbol esters, raising the possibility that this pathway may play a role in the modulation of intercellular junctions.