Activation of the diacylglycerol-protein kinase C (DAG-PKC) cascade by excess glucose has been implicated in vascular complications of diabetes. Its involvement in diabetic embryopathy has not been established. We examined DAG production and PKC activities in embryos and decidua of streptozotocin (STZ)-diabetic or transiently hyperglycemic mice during neural tube formation. STZ diabetes significantly increased DAG and total PKC activity in decidua (1.5-and 1.4-fold, respectively) and embryos (1.7-and 1.3-fold, respectively) on day 9.5. Membrane-associated PKC ␣, II, ␦, and were increased in decidua by 1.25-to 2.8-fold. Maternal hyperglycemia induced by glucose injection on day 7.5, the day before the onset of neural tube formation, also increased DAG, PKC activity, and PKC isoforms (1.1-, 1.6-, and 1.5-fold, respectively) in the embryo on day 9.5. Notably, membrane-associated PKC activity was increased 24-fold in embryos of diabetic mice with structural defects. These data indicate that hyperglycemia just before organogenesis activates the DAG-PKC cascade and is correlated with congenital defects.