Phospholipase C (PLC) activity and its response to stimulation by bile acids was assayed in cellular extracts from 16 primary human colon tumors of various Duke′s stages and paired adjacent normal mucosal samples. In the absence of bile acid, there was negligible degradation of phosphatidylinositol (PI) 1-stearoyl-2-[14C]-arachiodonoyl by tumor or normal tissue, but the addition of deoxycholic acid (DCA) or taurocholic acid (TCA) resulted in concentration-dependent and time-dependent stimulation of diacylglycerol (DAG) formation at optimal concentrations of 2 mM DCA and 4 mM TCA. Triton X-100 (0.125–1.0%) inhibited rather than enhanced the PI-degrading activity of these extracts, indicating that the stimulatory effects of DCA and TCA were not simply due to a detergent effect. Under the same assay conditions there was only a small amount of labeled monoacylglycerol or free arachidonic acid produced by extracts incubated in the absence or presence of DCA or TCA. No major differences in DAG production from PI were seen between paired samples of normal colon mucosa and primary colon tumors, in assays done in the presence of 2 mM TCA. Extracts from tumors in the distal part of the colon had higher activity than those from the proximal colon. This was also true for the extent of release of free arachidonic acid from labeled PI. Under the same conditions, labeled phosphatidylcholine or phosphatidylethanolamine did not serve as substrates for the colon mucosa or tumor extracts. Nor was there significant hydrolysis of the labeled DAG (1-stearoyl-2-14C-arachidonoylglycerol) by normal colon mucosa or tumor extracts, in the absence or presence of DCA or TCA. On the other hand, a low level of DAG lipase activity was detected in the presence of Triton X-100. These findings provide the first evidence that normal human colon mucosa and primary colon tumors contain a PI-specific PLC activity that is markedly stimulated by bile acids. Our results also suggest that bile acids may enhance colon carcinogenesis by acting on this enzyme system, thereby influencing signal transduction pathways in the target cells. © 1994 Wiley-Liss, Inc.