The involvement of endogenous diacylglycerol production in the stimulation of phosphatidylcholine synthesis by exogenous phospholipase C was examined using a neuroblastoma (LA-N-2) cell line. Phospholipase C treatment (0.1 unit/ml) of intact cells stimulated CTP:phosphocholine cytidylyltransferase activity significantly more effectively than did maximally effective concentrations of the synthetic diacylglycerol sn-1,2-dioctanoylglycerol (1 mM). When added to cells together with phospholipase C, oleic acid, but not dioctanoylglycerol, further increased cytidylyltransferase activity with respect to phospholipase C treatment alone, indicating that the enzyme was not maximally activated by the lipase. This suggests that the lack of additivity of diacylglycerol and phospholipase C reflects a common mechanism of action. The time course of activation of cytidylyltransferase by phospholipase C paralleled that of [3H]diacylglycerol production in cells prelabeled for 24 h with [3H]oleic acid. Diacylglycerol mass was similarly increased. Significant elevations of [3H]oleic acid and total fatty acids occurred later than did the increases in cytidylyltransferase activity and diacylglycerol levels. No significant reduction in total or [3H]phosphatidylcholine was elicited by this concentration of phospholipase C, but higher concentrations (0.5 unit/ml) significantly reduced phosphatidylcholine content. The stimulation of cytidylyltransferase activity by phospholipase C or dioctanoylglycerol was also associated with enhanced incorporation of [methyl-14C]choline into phosphatidylcholine. Dioctanoylglycerol was more effective than phospholipase C at stimulating the formation of [14C]phosphatidylcholine, and the effects of the two treatments were additive. However, further analysis revealed that dioctanoylglycerol served as a precursor for [14C]dioctanoylphosphatidylcholine as well as an activator of cytidylyltransferase; and when corrections were made for this effect, the apparent additivity disappeared. The results indicate that the generation of diacylglycerol by exogenous phospholipase C (and possibly the subsequent production of fatty acids via diacylglycerol metabolism) activates cytidylyltransferase activity in neuronal cells under conditions in which membrane phosphatidylcholine content is not measurably reduced.