The cellular slime mould Dictyostelium discoideum shows several responses after stimulation with the chemoattractant cAMP, including a transient rise in cyclic AMP (cAMP), cGMP and Ins(1,4,5)P3. In this paper the regulation of phospholipase C in vitro is described. Under our experimental conditions commercial PtdIns(4,5)P2 cannot be used to analyse phospholipase C activity in Dictyostelium lysates, because it is hydrolysed mainly to glycerophosphoinositol instead of Ins(1,4,5)P3. Enzyme activity was determined with endogenous unlabelled PtdInsP2 as a substrate. The product was measured by isotope-dilution assay and identified as authentic Ins(1,4,5)P3. Since phospholipase C is strictly Ca(2+)-dependent, with an optimal concentration range of 1-100 microM, cell lysates were prepared in EGTA and the enzyme reaction was started by adding 10 microM free Ca2+. Phospholipase C activity increased 2-fold during Dictyostelium development up to 8 h of starvation, after which the activity declined to less than 10% of the vegetative level. Enzyme activity in vitro increased up to 2-fold after stimulation of cells with the agonist cAMP in vivo. Addition of 10 microM guanosine 5'-[gamma-thio]triphosphate during lysis activated the enzyme to the same extent, and this effect was antagonized by guanosine 5'-[beta-thio]diphosphate. These results strongly suggest that surface cAMP receptors and G-proteins regulate phospholipase C during Dictyostelium development.