The effects of full-length amyloid beta protein, A(beta) (1-40), on phosphoinositide-specific phospholipase C (PLC) were investigated in synaptic plasma membranes (SPM) and cytosol prepared from the cerebral cortex of adult rats. Moreover, the role of A(beta) (1-40) on the activation of lipid peroxidation was evaluated. The activity of phospholipase C (PLC) acting on phosphatidylinositol (PI) and phosphatidylinositol-4,5-bisphosphate (PIP2) was determined using exogenous labeled substrates. The subcellular fractions were the source of enzyme(s). The radioactivity of lipid messengers derived from degradation of [14C- arachidonoyl] PI was also determined. The stable aggregated form of beta-amyloid peptide (1-40) at 25 microM concentration exerted reproducible effects. The aggregated form of A(beta) (1-40) inhibited Ca(2+)-regulated PI and PIP2 degradation by SPM and cytosolic enzymes. Aggregated A(beta) also decreased significantly the level of diacylglycerol, the product of PLC. This additionally supports the inhibitory effect of A(beta) on membrane-bound and cytosolic PLC. Moreover, A(beta) (1-40) significantly decreased the basal activity of the PIP2-PLC in SPM and the enzyme activity regulated through cholinergic receptors. However, in spite of the lower enzyme activity, the percentage distribution of inositol (1,4,5) P3 radioactivity (IP3) in the total pool of inositol metabolites was not significantly changed. The aggregated neurotoxic fragment, A(beta) (25-35), mimicked the effect of full-length A(beta) (1-40). A(beta) (1-40) enhanced the level of malondialdehyde indicating an activation of free radical stimulated membrane lipid peroxidation that may be involved in alteration of phospholipase(s) activity. Our results indicated that aggregated A(beta) (1-40) alters Ca(2+)-dependent phosphoinositide degradation affecting synaptic plasma membrane and cytosolic phospholipase(s) activity. Moreover, this peptide significantly decreased the phosphoinositide-dependent signal transduction mediated by cholinergic receptors. The effect of aggregated A(beta) (1-40) is more pronounced than that of the neurotoxic fragment A(beta) (25-35). Our study suggests that the deposition of aggregated A(beta) may alter phosphoinositide signaling in brain.