In Drosophila photoreceptors, the light-sensitive current is mediated downstream of phospholipase C by TRP (transient receptor potential) channels. Recent evidence suggests that Drosophila TRP channels are activated by diacylglycerol (DAG) or its metabolites (polyunsaturated fatty acids), possibly in combination with the reduction in phosphatidyl inositol 4,5 bisphosphate (PIP2). Consistent with this view, diacylglycerol kinase is identified as a key enzyme required for response termination. Signaling is critically dependent upon efficient PIP2 synthesis; mutants of this pathway in combination with genetically targeted PIP2 reporters provide unique insights into the kinetics and regulation of PIP2 turnover. Recent evidence indicates that a growing number of mammalian TRP homologues are also regulated by lipid messengers, including DAG, arachidonic acid, and PIP2.