Larvae of the marine bryozoan, Bugula neritina, are defended from predation by the bryostatins, polyketides synthesized by its uncultured endosymbiont, “Candidatus Endobugula sertula.” Bryostatins are potent modulators of the eukaryotic signaling protein, protein kinase C (PKC) that is involved in many eukaryotic cellular processes. The close association of the host and symbiont raises the possibility of an interaction between the symbiont-produced bryostatins and host PKCs. Such interaction could impact PKC regulated host cellular processes, which could result in altered host physiology. In this study, I investigated the response of the bryozoan host in the absence of the symbiont and symbiont-produced bryostatins. Western blot analysis of protein extracts from symbiotic and symbiont-reduced B. neritina colonies revealed a difference in bryostatin-activated conventional PKCs, but none for bryostatin-independent PKCs. Similar results were observed for PKCs in the model invertebrate, Caenorhabditis elegans, exposed to bryostatin, suggesting that the symbiont-produced bryostatins potentially modulate PKC activity and therefore PKC-mediated cellular processes in symbiotic B. neritina and bryostatin-exposed C. elegans. The number of ovicell-bearing female zooids in symbiont-reduced colonies was significantly decreased, suggesting a role of symbiont in the host reproduction. Interestingly, the female zooids in both the colony types were healthy and no anatomical or molecular differences were found except that fewer female zooids occur in symbiont-depleted colonies. The lack of difference in female zooids indicate that the symbiont does not affect the female structures and functions in the zooid, but potentially influences the early stage differentiation of the female zooid in the colony. I hypothesize that symbiont-produced bryostatins via PKC activation signal early stage differentiation of the female zooids in the colony. Additionally, microscopic investigation revealed the presence of previously undescribed ‘funicular bodies’ containing bacteria in the symbiotic colonies. However, the bacteria associated with the ‘funicular bodies’ and funicular strands in the symbiotic colonies were morphologically different and are potentially an adaptation for successful mutualistic association with the bryozoan host