The plasma membranes of bovine adrenal chromaffin cells were isolated and the activities of enzymes involved in arachidonic acid liberation were investigated. Only a minute activity of phospholipase A 2 (phosphatide 2-acylhydrolase, EC 3.1.1.4) could be detected using externally added phosphatidylcholine (PC) and phosphatidylethanolamine (PE) as substrate. When membranes were treated with exogenous phospholipase C (orthophosphoric acid diester phosphohydrolase, EC 3.1.4.1) there was a liberation of free fatty acids from the sn-2 position of PC. The enzyme responsible for this effect could be demonstrated to be a diacylglycerol lipase (glycerol ester hydrolase, EC 3.1.1.3) localized in the plasma membrane. Using phosphatidylinositol (PI) as a substrate, it was found that an endogenous phospholipase C exists which co-purifies with the membrane preparation. The produced diacylglycerol is subsequently hydrolyzed by diacylglycerol lipase liberating arachidonic acid. The two enzymes, phospholipase C and diacylglycerol lipase were characterized. Phospholipase C was found to be calcium dependent and PI specific, showing an activity of 60 pmol/μg protein per h (1.2 mM Ca 2+), whereas the diacylglycerol lipase was calcium independent hydrolyzing diacylglycerol at a rate of 7.2 pmol/μg protein per h. The lipase but not the phospholipase C was inhibited 50% by 1.7 mM para-bromophenacylbromide.