Microinjection of LiCl into prospective ventral blastomeres of the 32-cell Xenopus embryo gives rise to duplication of dorsoanterior structures such as the notochord, neural tube, eyes, and cement gland. We report here that this teratogenic effect of Li+ is prevented by coinjection of equimolar myo-inositol, an intermediate of the polyphosphoinositide cycle. In contrast, epi-inositol, a nonbiological positional isomer of inositol not employed in this cycle, is ineffective at rescuing Li+-injected embryos. Treatment of embryos at stage 7 with the tumor promoter, phorbol myristate acetate (an analog of the polyphosphoinositide cycle-derived second messenger, diacylglycerol), also prevents dorsoanterior duplication of Li+ embryos, while the nontransforming analog, phorbol myristate acetate-4-O-methyl ether, is without effect. Both of these rescuing agents are without obvious effects on development when administered alone (i.e., without Li+). Li+-selective microelectrode measurements demonstrate that intracellular Li+ levels are identical when Li+ is injected with or without myo-inositol. Clonal analysis shows that blastomeres injected with Li+ plus myo-inositol make a normal contribution of progeny to the later embryo. Because Li+ is a well-established inhibitor of the polyphosphoinositide cycle and can thereby have profound effects on cellular myo-inositol and diacylglycerol levels, these observations concerning inositol-mediated rescue suggest a role for altered polyphosphoinositide cycle activity in lithium-induced teratogenesis.