Abstract: Phosphatidylinositol phosphodiesterase (PL-C) appears to be a key element in the adrenergic regulation of pineal cyclic AMP levels. In the present study, the rat pineal enzyme was characterized using exogenous [3H]phosphati-dylinositol (0.5 mM) as substrate. Half the enzyme activity was found in the cytosolic fraction, but the highest specific concentration was associated with the membrane fraction. Two pH optima (5.5 and 7.5) of enzyme activity were observed for the membrane fraction but only one in the cyto-sol fraction (pH 5.5). Enzyme activity in both fractions was Ca2+ dependent. In the case of the membrane protein in pH 7.5, the enzyme activity was sensitive to changes in Ca2+ in the 10–100 nAf range. Addition of an equimolar concentration of phosphatidylinositol 4-phosphate nearly completely inhibited the hydrolysis of [3H]phosphatidylinositol; other phospholipids (1.0 mM) were less potent. This may reflect our present finding that [3H]phosphatidylinositol 4-phosphate is a better substrate than [3H]phosphatidylinositol for the enzyme. Stimulus deprivation (2 weeks of constant light or superior cervical ganglionectomy) reduced the cytosolic activity by 30% and had no effect on the membrane-associated enzyme.