The membrane protein plasma cell differentiation antigen 1 (PC-1) has been purified as an inhibitor of insulin receptor tyrosine kinase activity and has been implicated in the pathogenesis of NIDDM. However, we show here that PC-1 is a general protein kinase inhibitor in vitro and that this inhibition results from the hydrolysis of ATP by the intrinsic nucleotide pyrophosphatase activity of PC-1. Thus, the inhibition diminished with increasing ATP concentrations, and it was nullified when the ATP concentration was kept constant with a regenerating system or when ATP was added repetitively. When care was taken to avoid ATP depletion, PC-1 did not affect the insulin sensitivity of insulin receptor autophosphorylation. We conclude that the reported inhibition of insulin signaling by PC-1 does not result from a direct inhibition of the insulin receptor kinase activity.