A phosphoinositide signalling cycle is present in the nucleus, independent of that which occurs at the plasma membrane. The key enzyme involved in this cycle is phospholipase (PLC) beta1. This nuclear cycle has been shown to be involved in both cell proliferation and differentiation. Here, we report that nuclear PLCbeta1 activity is upregulated during differentiation of 3T3-L1 adipocytes. During differentiation there are two phases of PLCbeta1 activity; the first occurs within 5 min of treatment with differentiation media, does not require new PLCbeta1 to enter the nucleus and is regulated by pERK and PKC alpha while the second phase occurs from day 2 of differentiation, requires new PLCbeta1 protein to enter the nucleus and is independent of regulation by pERK and PKC alpha. Over-expression with the PLC mutants, Deltamk (which lacks the ERK phosphorylation site) and M2B (which lacks the nuclear localisation sequence), revealed that both phases of PLCbeta1 activity are required for terminal differentiation to occur. Inhibition of PLCbeta1 activity prevents the upregulation of cyclinD3 and cdk4 protein, suggesting that PLCbeta1 plays a role in the control of the cell cycle during differentiation. These results indicate nuclear PLCbeta1 as a key regulator of adipocyte differentiation.