The excitatory amino acid agonists kainate, N-methyl-D-aspartate (NMDA), and quisqualate inhibited ligand-stimulated phosphoinositide hydrolysis in rat cortical slices. The NMDA channel blocker MK-801 antagonized the inhibition by NMDA but had no effect on the inhibition due to kainate or quisqualate. The antagonist 6-cyano-7-nitroquinoxaline-2,3-dione blocked the effects of quisqualate and kainate but not the effect of NMDA. These data indicate that activation of the NMDA, alpha-amino-3-hydroxy-5-methylisoxazole-4-propionic acid, and kainate types of ionotropic receptors has the same effect. In membranes prepared from cortical slices, there was no inhibition of carbachol-stimulated phosphoinositidase C activity by excitatory amino acids, suggesting that excitatory amino acids indirectly affect carbachol-stimulated phosphoinositide hydrolysis. The inhibition by excitatory amino acids of carbachol-stimulated phosphoinositide breakdown was dependent on extracellular Mg2+ and was abolished by procedures that increase intracellular Ca2+. Veratridine inhibition of carbachol-stimulated phosphoinositide hydrolysis was reversed by ouabain but not by other procedures that increase intracellular Ca2+. In contrast to excitatory amino acids, veratridine potentiated carbachol-stimulated phosphoinositide breakdown in the presence of 10 mM extracellular Mg2+. These data suggest that excitatory amino acids inhibit carbachol-stimulated phosphoinositide breakdown in rat cortex by lowering intracellular Ca2+ through a mechanism dependent on extracellular Mg2+.