Ras-transformation of cells is accompanied by an increase of the level of diacylglycerol (DAG), which participates in the signal transduction pathways. DAG could be generated from phospholipids either by activation of phospholipase C or by a more complex pathway involving phospholipase D and phosphatidate phosphohydrolase. To clarify which phospholipids produce DAG and which pathways are involved, we examined the DAG generating enzyme activities, using phosphatidylcholine (PC), phosphatidylethanolamine (PE) and phosphatidylinositol (PI) as substrates. The study showed that the breakdown of PC and more markedly of PE by phospholipases C and D was stimulated in membranes from ras-transformed cells. Phosphatidate phosphohydrolase activity was also elevated in oncogene-expressing cells. The increase in glycerol uptake was most pronounced in cells given PE, followed by PC. The fatty acid analysis revealed apparent similarities between the acyl chains of PE and DAG only in the transformed cells. These findings suggest that PE is a source of DAG in ras-fibroblasts but does not rule out the role of PC in DAG production, due to the activation of the PC-specific phospholipases C and D.