This article focuses on the role of protein phosphorylation, especially that mediated by protein kinase C (PKC), in neurotransmitter release. In the first part of the article, the evidence linking PKC activation to neurotransmitter release is evaluated. Neurotransmitter release can be elicited in at least two manners that may involve distinct mechanisms: Evoked release is stimulated by calcium influx following chemical or electrical depolarization, whereas enhanced release is stimulated by direct application of phorbol ester or fatty acid activators of PKC. A markedly distinct sensitivity of the two pathways to PKC inhibitors or to PKC downregulation suggests that only enhanced release is directly PKC-mediated. In the second part of the article, a framework is provided for understanding the complex and apparently contrasting effects of PKC inhibitors. A model is proposed whereby the site of interaction of a PKC inhibitor with the enzyme dictates the apparent potency of the inhibitor, since the multiple activators also interact with these distinct sites on the enzyme. Appropriate PKC inhibitors can now be selected on the basis of both the PKC activator used and the site of inhibitor interaction with PKC. In the third part of the article, the known nerve terminal substrates of PKC are examined. Only four have been identified, tyrosine hydroxylase, MARCKS, B-50, and dephosphin, and the latter two may be associated with neurotransmitter release. Phosphorylation of the first three of these proteins by PKC accompanies release. B-50 may be associated with evoked release since antibodies delivered into permeabilized synaptosomes block evoked, but not enhanced release. Dephosphin and its PKC phosphorylation may also be associated with evoked release, but in a unique manner. Dephosphin is a phosphoprotein concentrated in nerve terminals, which, upon stimulation of release, is rapidly dephosphorylated by a calcium-stimulated phosphatase (possibly calcineurin [CN]). Upon termination of the rise in intracellular calcium, dephosphin is phosphorylated by PKC. A priming model of neurotransmitter release is proposed where PKC-mediated phosphorylation of such a protein is an obligatory step that primes the release apparatus, in preparation for a calcium influx signal. Protein dephosphorylation may therefore be as important as protein phosphorylation in neurotransmitter release.