Previous studies have shown that muscarine increases the incorporation of 32Pi and [3H]inositol into phosphatidylinositol in the superior cervical ganglion of the rat. Because the first event in agonist-stimulated phospholipid turnover is thought to be the hydrolysis of phosphatidylinositol or of phosphatidylinositol phosphates, we measured the accumulation of [3H]inositol phosphates in ganglia in which these lipids had been labeled by preincubation with [3H]inositol. The production of [3H]inositol phosphates under these conditions presumably reflects the activity of a phospholipase C in the ganglion. Muscarine caused a large increase in the formation of [3H]inositol phosphates. Most of this increase was in the form of [3H]inositol-1-phosphate. The stimulation of [3H]inositol phosphate accumulation by muscarine was not dependent upon the presence of extracellular Ca++. Agents that increase Ca++ influx caused only a small increase in the accumulation of [3H]inositol phosphates. We also measured the formation of [3H]inositol phosphates in extracts of the ganglion. These extracts contained a phospholipase C activity that was stimulated by deoxycholate and that hydrolyzed phosphatidylinositol phosphates more actively than phosphatidylinositol. This phospholipase C activity was Ca++-dependent. We propose that muscarine may activate this phospholipase C in the intact ganglion and that muscarine increases phospholipase C activity by some mechanism other than by increasing the influx of Ca++.