The properties of phospholipase C (PL-C) in the plasma membranes (PM) and the cytosol of osteoblast-like osteosarcoma cells, UMR-106, were analyzed to see if separate enzymes or similar enzymes were involved in signalling, transduction, and arachidonate release. The cytosolic PL-C displayed substrate affinities in the order of phosphatidylinositol (PI) > phosphatidylinositol-4-phosphate (PIP) or phosphatidylinositol-4, 5-bisphosphate (PIP2). Hydrolysis of PI, PIP, and PIP2 by cytosolic PL-C was not affected by GTP or GTP(γ)S and other nucleotides. PI hydrolysis by PM and cytosolic PL-C was undetectable in the presence of 500 μM EGTA and displayed two activity plateaus at various concentrations of Ca2+. The Km for Ca2+ in the PL-C activity of the first plateau was 0.08 μM. Significant hydrolysis of PIP2 by cytosolic PL-C was observed in the absence of Ca2+. In contrast to the enzyme(s) predominant in the cytosol, the order of substrate affinities for PM PL-C was PIP2 > PIP > PI. Only PIP2 hydrolysis by PM PL-C was stimulated by both GTP and GTP(γ)S in a dose-dependent manner. PIP2 hydrolysis by PL-C of the PM was not observed in the absence of CA2+, serving to further discriminate this enzyme activity from that of the cytosol. PIP2 hydrolysis by PL-C of the PM also was biphasic in the dependence on Ca2+. At resting cytosolic Ca2+ levels, the Vmax of the high affinity activity already had been achieved. Guanine nucleotide stimulation of PIP2 hydrolysis by PM PL-C was characterized by increased maximum activity with an unchanged Km for Ca2+ or for PIP2. The pH optimum of PIP2 hydrolysis was similar between cytosolic and PM forms of PL-C. PIP2 hydrolysis with production of IP3 (PL-C activity) in UMR-106 cells treated with [2-3H]-myoinositol was stimulated by PTH, and this stimulation was not inhibited by pertussis toxin. These data suggest that UMR-106 cells possess at least two distinct PL-C activities, one predominant in the cytosol and activated by increasing cytosolic Ca2+ with PI as the substrate. The second enzyme, a GTP-activated PIP2-specific PL-C in the plasma membranes may play an important role in hormone-induced PIP2 hydrolysis mediated through guanine nucleotide regulatory proteins and may participate in the hormonal regulation of osteoblast cytosolic Ca2+ and bone remodeling functions.