1. A phosphodiesterase, active at an alkaline pH, is present in the outer cortex of rat kidney and hydrolyses glycerylphosphorylinositol into glycerol and phosphorylinositol. Some inositol cyclic phosphate can also be formed indicating that the enzyme can act as a cyclizing phosphotransferase. 2. The enzyme is stimulated by Ca2+(2-3mM) whereas Mg2+ is inhibitory. 3. The activity is markedly stimulated by low concentrations of thiol reagents (1-2mM) such as cysteine or dithiothreitol. 4. The properties of the enzyme have been compared with glycerylphosphinicocholine diesterase (EC 3.1.4.2), which is also present in the isolated enzyme complex, and it is concluded that the enzymes have separate identities.