There has recently been rapid progress in understanding receptors that generate intracellular signals from inositol lipids. One of these lipids, phosphatidylinositol 4,5-bisphosphate, is hydrolysed to diacylglycerol and inositol trisphosphate as part of a signal transduction mechanism for controlling a variety of cellular processes including secretion, metabolism, phototransduction and cell proliferation. Diacylglycerol operates within the plane of the membrane to activate protein kinase C, whereas inositol trisphosphate is released into the cytoplasm to function as a second messenger for mobilizing intracellular calcium.