Mouse peritoneal macrophages synthesize large amounts of prostaglandins and leukotrienes in response to certain inflammatory stimuli. Lipopolysaccharide and phorbol esters stimulate prostaglandin formation but not leukotriene synthesis. Zymosan and the calcium ionophore, A23187, stimulate the formation of both prostaglandins and leukotrienes, as well as the phospholipase C-catalyzed breakdown of phosphoinositides. We have examined the interrelationships among phosphoinositide breakdown and prostaglandin and leukotriene synthesis in resident mouse peritoneal macrophages. We demonstrate that macrophages synthesize basally prostaglandin (PG)E2 and PGI2 and that these products begin to accumulate from the time of initial plating of the macrophages. The presence of these prostaglandins imparts a downward modulation of zymosan-stimulated phosphoinositide breakdown and, as a result, a downward modulation on leukotriene formation. Inhibition of the basal release of prostaglandin by indomethacin resulted in enhanced zymosan-stimulated phosphoinositide breakdown and an exactly corresponding enhancement of leukotriene release. This enhancement, resulting from the inclusion of indomethacin at the time of plating, was reversed by also including PGE2, PGI2, or dibutyryl cAMP. Dibutyryl cAMP, when added in the presence of zymosan and in the absence of indomethacin treatment, inhibited phosphoinositide breakdown and leukotriene synthesis in a parallel fashion, with no effect on prostaglandin release. These data demonstrate that phospholipase C activation is regulated in part by prostaglandin tone and that leukotriene synthesis, unlike prostaglandin synthesis, is dependent on phosphoinositide breakdown.