The hydrolysis of phosphatidylinositol 4,5-bisphosphate (PtdInsP2) is a widespread receptor-coupled signalling system at the plasma membrane of most eukaryotic cells. The existence of an entirely separate nuclear phosphoinositide signalling system is suggested from evidence that purified nuclei synthesize PtdInsP2 and phosphatidylinositol 4-phosphate (PtdInsP) in vitro and that a transient decrease in the mass of these lipids occurs when Swiss 3T3 cells are cultured in the presence of insulin-like growth factor-1 (IGF-1). These IGF-1-dependent changes in inositol lipids coincide with an increase in nuclear diacyglycerol and precede translocation to the nucleus and activation of protein kinase C (refs 5, 6). Circumstantial evidence that links these changes with mitosis comes from the isolation of a 3T3 clone that expresses the type-1 IGF receptor and binds IGF-1 peptide but does not respond mitogenically or show transient mass changes in nuclear inositol lipids. A key question is how IGF-1 initiates the rapid breakdown of PtdInsP and PtdInsP2 in the nucleus. Here we present evidence that nuclei of 3T3 cells contain the beta-isozyme of phosphoinositidase C, whereas the gamma-isozyme is confined to the cytoplasm and that IGF-1 treatment stimulates exclusively the activity of nuclear phosphoinositidase C.