For the last decade, it has been believed that phosphatidylinositol (PI) in mycobacteria is synthesized from free inositol and CDP-diacylglycerol by PI synthase in the presence of ATP. The role of ATP in this process, however, is not understood. Additionally, the PI synthase activity is extremely low compared with the PI synthase activity of yeast. When CDP-diacylglycerol and [(14)C]1L-myo-inositol 1-phosphate were incubated with the cell wall components of Mycobacterium smegmatis, both phosphatidylinositol phosphate (PIP) and PI were formed, as identified by fast atom bombardment-mass spectrometry and thin-layer chromatography. PI was formed from PIP by incubation with the cell wall components. Thus, mycobacterial PI was synthesized from CDP-diacylglycerol and myo-inositol 1-phosphate via PIP, which was dephosphorylated to PI. The gene-encoding PIP synthase from four species of mycobacteria was cloned and expressed in Escherichia coli, and PIP synthase activity was confirmed. A very low, but significant level of free [(3)H]inositol was incorporated into PI in mycobacterial cell wall preparations, but not in recombinant E. coli cell homogenates. This activity could be explained by the presence of two minor PI metabolic pathways: PI/inositol exchange reaction and phosphorylation of inositol by ATP prior to entering the PIP synthase pathway.