The nature of reactions catalysed by yeast phosphatidylinositol synthase expressed in E. coli has been investigated. The single enzyme is shown to carry both CDP-diacylglycerol-dependent incorporation of inositol into phosphatidylinositol (Km for inositol of 0.090 mM) and a CDP-diacylglycerol-independent exchange reaction between phosphatidylinositol and inositol (Km for inositol of 0.066 mM). The exchange reaction and reversal of phosphatidylinositol synthase were both stimulated by CMP, but had different optimum pH and requirements for substrates. These results suggest that CMP-stimulated exchange and CMP-dependent reverse reactions are distinct processes catalysed by the same enzyme, phosphatidylinositol synthase.