The molecular signals governing retinal development remain poorly understood, but some key molecules that play important roles have been identified. Activation of STAT3 by cytokines such as LIF and CNTF specifically blocks differentiation of rod photoreceptors. Here we test the hypothesis that PKC activation promotes development of rod photoreceptors by inhibiting STAT3. Explant cultures of mouse retina were used to study the effects of PKC activation on rod development. The expression of opsin, a rod specific marker, is induced at an early stage in retina explants cultured in the presence of PMA and this effect is prevented by the PKC inhibitor Go7874. Histological experiments show that there is expression of PKC beta1, but not PKC-alpha in the outer nuclear layer between E17.5 and PN5. In vitro data derived from cell lines shows that activation of PKC results in reduction of STAT3 phosphorylation. In addition, inhibition of PKC results in increase STAT3 phosphorylation. We suggest that cross talk of signals between STAT3 and PKC may determine the differentiation of rods from retinal progeitors.