Epithelial organization is maintained by cell proliferation, migration, and differentiation. In the case of the gastric epithelium, at least some of these events are regulated by the hormone gastrin. In addition, gastric epithelial cells are organized into characteristic tubular structures (the gastric glands), but the cellular mechanisms regulating the organization of tubular structures (sometimes called branching morphogenesis) are uncertain. In the present study, we examined the role of the gastrin-cholecystokinin_B receptor in promoting branching morphogenesis of gastric epithelial cells. When gastric cancer AGS-G_R cells were cultured on plastic, gastrin and PMA stimulated cell adhesion, formation of lamellipodia, and extension of long processes in part by activation of protein kinase C (PKC) and phosphatidylinositol (PI)-3 kinase. Branching morphogenesis was not observed in these circumstances. However, when cells were cultured on artificial basement membrane, the same stimuli increased the formation of organized multicellular arrays, exhibiting branching morphogenesis. These effects were reversed by inhibitors of PKC but not of PI-3 kinase. We conclude that, in the presence of basement membrane, activation of PKC by gastrin stimulates branching morphogenesis.