1. Microsomal membranes from rat liver were incubated with ATP, CoA, Mg2+, [14C]palmitate, F- and sn-glycerol 3-phosphate in order to label them with [14C]phosphatidate. These membranes were isolated and used in a second incubation in which [3H]CTP was present, and the simultaneous synthesis of [14C]diacylglycerol and [3H]CDP-diacylglycerol was measured. 2. The addition of phosphatidate phosphohydrolase, which had been partially purified from the particle-free supernatant, supplemented the activity of the endogenous phosphohydrolase, but it did not alter the rate of CDP-diacylglycerol formation. 3. Adding EDTA inhibited phosphatidate cytidylyl-transferase activity and stimulated the activity of the phosphohydrolases by removing excess of Mg2+. 4. Increasing the concentration of Mg2+, norfenfluramine or chlorpromazine in the assay system stimulated cytidylyltransferase activity, but decreased the activities of both phosphohydrolases. 5. The mechanism for the stimulation of cytidylyl=transferase activity by the cationic drugs and Mg2+ was investigated with emulsions of phosphatidate and the microsomal fraction of rat liver. 6. There was a threshold concentration of about 5mM-MgCl2 below which no cytidylyltransferase activity was detected in the presence or absence of norfenfluramine. Just above this threshold concentration norfenfluramine stimulated cytidylyltransferase activity, but this stimulation disappeared as the Mg2+ concentration was raised to its optimum of 20mM. Norfenfluramine therefore partially replaced the bivalent-cation requirement. 7. At 30 mM-MgCl2 amphiphilic cationic drugs inhibited cytidylyltransferase activity at relatively high concentrations in a non-competitive manner with respect to phosphatidate. 8. The implications of these results are discussed with respect to the regulation of the synthesis of the acidic phospholipids compared with the synthesis of phosphatidylcholine, phosphatidylethanolamine and triacylglycerol.