Receptor occupation by a variety of Ca2+-mobilizing hormones, such as alpha 1-adrenergic agents, vasopressin and angiotensin II, causes a rapid phosphodiesterase-mediated hydrolysis of phosphatidylinositol-4,5-bisphosphate in the plasma membrane with the production of the water soluble compound myo-inositol-1,4,5-trisphosphate (IP3) and the lipophilic molecule 1,2-diacylglycerol (DG). This review summarizes the recent evidence obtained in the liver that defines the roles of these products as intracellular messengers of hormone action. Intracellular Ca2+ mobilization is mediated by IP3, which releases Ca2+ from a subpopulation of the endoplasmic reticulum, resulting in a rapid increase of the cytosolic free Ca2+ concentration ( [Ca2+]i). Further effects of receptor occupancy are inhibition of the plasma membrane Ca2+-ATPase, despite net Ca2+ efflux, and an increased permeability of the plasma membrane to extracellular Ca2+. The activation of the phospholipid-dependent protein kinase C by DG does not alter Ca2+ fluxes across the plasma membrane. In contrast to some secretory cells, a synergism between protein kinase C activation and increased [Ca2+]i is not observed in liver. Activation of protein kinase C profoundly inhibits the response to alpha 1-adrenergic agonists, with only minimal effects on the vasopressin response. It is concluded that in liver the two inositol-lipid messenger systems, IP3 and DG, exert their effects by essentially separate pathways.