Agonist-stimulated phospholipid turnover can generate diacylglycerol (DAG), an intracellular second messenger that activates protein kinase C (PKC). DAG can be produced from the hydrolysis of phosphatidylinositol 4,5-bisphosphate (PIP2) by a phosphoinositide-specific phospholipase C and by the degradation of phosphatidylcholine (PC) by a phospholipase C or the concerted actions of phospholipase D and phosphatidate phosphohydrolase. In vascular smooth muscle, agonist-stimulated DAG accumulation is biphasic; PIP2 hydrolysis produces a transient increase in DAG, which is followed by a sustained phase of DAG accumulation from PC degradation. Metabolism of DAG attenuates PKC activation and thus results in signal termination. The metabolic fates for DAG include 1) ATP-dependent phosphorylation to form phosphatidic acid (DAG kinase), 2) hydrolysis to release fatty acids and glycerol (DAG and monoacylglycerol lipases), 3) synthesis of triacylglycerol (DAG acyltransferase), and 4) synthesis of PC (choline phosphotransferase). Hydrolysis through the lipase pathway is the predominant metabolic fate of DAG in vascular smooth muscle. Activation of PKC in vascular smooth muscle modulates agonist-stimulated phospholipid turnover, produces an increase in contractile force, and regulates cell growth and proliferation. Further research is required to investigate cross talk between signal transduction mechanisms involving lipid second messengers. In addition, spatial considerations such as nuclear PKC activation and the influence of diradylglycerol generation on the duration of PKC activation are important issues.