Human bile contains a phospholipase C activity. To examine its pathophysiological importance, the effect of phospholipase C on the dynamics of lipid solubilization and nucleation (cholesterol crystal formation) were investigated in model bile. Phospholipase C from gallbladder bile from patients with gallstones was partially purified by competitively eluting from a concanavalin A (con A)-Sepharose (Sigma, St. Louis, MO) column and incubating with Pronase (Calbiochem, Behring Diagnostics, La Jolla, CA). Phospholipase C activity was resistant to Pronase digestion. When this fraction (concentrated to half the original volume) was mixed with model bile (1:1, vol/vol), a transfer of cholesterol and phospholipid from the micellar to the vesicular phase and an accelerate nucleation time were found concomitant with phospholipid hydrolysis. These effects were prevented by inhibiting the phospholipase C activity with ethylenediaminetetraacetic acid. To confirm that the results were caused by phospholipase C activity and not some other nucleation-promoting factor within the biliary con A preparation, model bile was incubated with bacterial phospholipase C. An identical cascade of events to that found with the partially purified biliary enzyme was observed. Further purification of the con A-bound proteins on DEAE-Sephadex (Pharmacia, Uppsala, Sweden) did not resolve any separate nucleation-promoting activity to that associated with phospholipase C activity. In conclusion, this study has identified phospholipase C as a/the con A nucleation-promoting activity in human gallbladder bile and has characterized a possible molecular mechanism by which cholesterol nucleation is stimulated by this fraction.