1. Phosphatidate phosphohydrolase from the particle-free supernatant of rat liver was assayed by using emulsions of phosphatidate as substrate. 2. The inhibition of the phosphohydrolase by chlorpromazine was of a competitive type with respect to phosphatidate. The potency of various amphiphilic cationic drugs as inhibitors of this reaction was related to their partition coefficients into a phosphatidate emulsion. 3. The effect of chlorpromazine on the phosphohydrolase activity was complementary rather than antagonistic towards Mg2+. Chlorpromazine stimulated the phosphohydrolase activity in the absence of added Mg2+ and was able to replace the requirement for Mg2+. However, at optimum concentrations of Mg2+, chlorpromazine inhibited the reaction, as did Ca2+. The phosphohydrolase activity was also stimulated by Co2+ and to a lesser extent by Mn2+, Fe2+, Fe3+, Ca2+, spermine and spermidine when Mg2+ was not added to the assays. 4. It is concluded that the inhibition of phosphatidate phosphohydrolase by amphiphilic cations can largely be explained by the interaction of these compounds with phosphatidate, which changes the physical properties of the lipid, making it less available for conversion into diacylglycerol. 5. The implications of these results to the effects of amphiphilic cations in redirecting glycerolipid synthesis at the level of phosphatidate are discussed.