Berridge proposed a scheme in which phospholipase C (PLC) hydrolyzed phosphatidylinositoI 4, 5-bisphosphate [PtdIns (4, 5) P2] to yield inositol 1, 4, 5-trisphosphate [Ins (I, 4, 5) P3] and diacylglycerol. However, the multiple sources of diacylglycerol (2), as well as the many intermediates, enzymes, and routes for formation of inositol phosphates (3), indicate that this signal transducing pathway is much more complex than described previously. Many new reactions, enzymes, and inositol phosphate-binding proteins have been discovered, and molecular genetic approaches have begun to further define the structures and functions of the proteins involved. Rather than catalog all of the new information, I present selected topics that have yielded new insights for future directions of research. I do not discuss calcium ion mobilization in response to Ins (I, 4, 5) P3 as this topic has been reviewed elsewhere (4-7). The main subjects to be discussed are (a) mechanisms for triggering phosphatidyl inositol turnover and inositol phosphate production;(b) characterization of enzymes that metabolize inositol phosphates;(c) pathways for metabolism of inositol pentaphosphates and inositol hexaphosphates;(d) inositol phosphate binding proteins, especially the Ins (1, 4, 5) P3-binding protein; and (e) the newly discovered 3-phosphate-containing inositol phospholipids.