We have reported previously that the abnormally down-regulated protein kinase C (PKC) causes cellular dysfunction observed in natural killer (NK) cells, polymorphonuclear leucocytes (PMNs) and fibroblasts from beige mouse, an animal model of Chediak–Higashi syndrome (CHS). Here we show that the abnormal down-regulation of PKC activity also occurs in Epstein–Barr (EB) virus-transformed cell lines from CHS patients. When CHS cell lines were stimulated with concanavalin A (Con A) for 20 min, the membrane-bound PKC activity declined markedly, whereas that in control cell lines increased. We found that E-64-d, which protects PKC from calpain-mediated proteolysis, reversed the declined PKC activity and corrected the increased Con A cap formation to almost normal levels in CHS cell lines. We confirmed that the dysregulation of PKC activity also occurred in peripheral blood mononuclear leucocytes (PBMC) from CHS patients and that E-64-d corrected both the declined PKC activity and increased Con A cap formation. E-64-d also corrected the reduced lysosomal elastase and cathepsin G activity in CHS cell lines. In contrast, chelerythrin, a specific inhibitor of PKC, and C2-ceramide, which promotes PKC breakdown induced by calpain, increased Con A cap formation and inhibited both elastase and cathepsin G activity in normal cell lines. Moreover, we found that ceramide production in CHS cell lines increased significantly after Con A stimulation, which coincides with our previous observation in fibroblasts from CHS mice. These results suggest an association between ceramide-induced PKC down-regulation and the cellular dysfunctions in CHS.