Preparations of rod outer segments from cattle retinas contained soluble and particulate phospholipase C activities which hydrolyzed phosphatidylinositol 4,5-bisphosphate (PIP2) and the other phosphoinositides. Ca2+ was required for PIP2 hydrolysis, but high (greater than 300 microM) concentrations were inhibitory. Mg2+ and spermine at low concentrations stimulated the particulate activity but inhibited the soluble. Mn2+ inhibited both. High (greater than 100 microM) concentrations of the nonhydrolyzable GTP analogue guanylyl beta,gamma-methylenediphosphonate inhibited PIP2 hydrolysis by both the soluble and particulate activities, but guanosine 5'-O-(3-thiotriphosphate) (GTP gamma S), fluoride, and cholera and pertussis toxins were without effect. Overall phospholipase C activity in ROS was unaffected by light. Evidence was found for multiple forms of the enzyme, requiring isolation and separate characterization before ruling out regulation by light or G-protein.