We reported previously that protein kinase Calpha (PKCalpha), a negative regulator of cell growth in the intestinal epithelium, inhibits cyclin D1 translation by inducing hypophosphorylation/activation of the translational repressor 4E-BP1. The current study explores the molecular mechanisms underlying PKC/PKCalpha-induced activation of 4E-BP1 in IEC-18 nontransformed rat ileal crypt cells. PKC signaling is shown to promote dephosphorylation of Thr(45) and Ser(64) on 4E-BP1, residues directly involved in its association with eIF4E. Consistent with the known role of the phosphoinositide 3-kinase (PI3K)/Akt/mTOR pathway in regulation of 4E-BP1, PKC signaling transiently inhibited PI3K activity and Akt phosphorylation in IEC-18 cells. However, PKC/PKCalpha-induced activation of 4E-BP1 was not prevented by constitutively active mutants of PI3K or Akt, indicating that blockade of PI3K/Akt signaling is not the primary effector of 4E-BP1 activation. This idea is supported by the fact that PKC activation did not alter S6 kinase activity in these cells. Further analysis indicated that PKC-mediated 4E-BP1 hypophosphorylation is dependent on the activity of protein phosphatase 2A (PP2A). PKC signaling induced an approximately 2-fold increase in PP2A activity, and phosphatase inhibition blocked the effects of PKC agonists on 4E-BP1 phosphorylation and cyclin D1 expression. H(2)O(2) and ceramide, two naturally occurring PKCalpha agonists that promote growth arrest in intestinal cells, activate 4E-BP1 in PKC/PKCalpha-dependent manner, supporting the physiological significance of the findings. Together, our studies indicate that activation of PP2A is an important mechanism underlying PKC/PKCalpha-induced inhibition of cap-dependent translation and growth suppression in intestinal epithelial cells.