Under physiological conditions, protein kinase C is active when bound to membranes. Like most membrane-bound enzymes, its activity is dependent on the nature of its lipid environment. In this article, Richard Epand and David Lester describe the relationship between the ability of specific membrane-active agents to alter the biophysical properties of the lipid environment and their potential to modulate protein kinase C activity. They argue that this can lead to a greater understanding of the mechanism of inhibition and activation of protein kinase C through modulation of the bulk biophysical properties of the membrane, and may provide a new approach to the development of a more specific set of inhibitors.