Previous studies have shown that vertebrate rod outer segments (ROS) have a light activated phospholipase C which hydrolyzes phosphatidylinositol-4,5-bisphosphonate (PIP2). Three different experimental approaches have been used to test the hypothesis that the phosphatidylinositol (PI) biosynthetic cycle is present in ROS and that PIP2 can be regenerated from DG independent of rod inner segments. In the first study, enzyme activities of the PI cycle were assayed simultaneously in the presence of CTP, myo-inositol and [gamma-32P]ATP using endogenous lipids as substrates. Under these conditions, broken (leaky) ROS prepared by continuous sucrose gradient centrifugation showed PI, PIP and DG kinase activities similar to those found in intact ROS and non-ROS membranes, whereas PI synthetase activity was much lower in the leaky ROS than in the other two fractions. The relative distribution of PI synthetase specific activity in the three membrane preparations was similar to that of the microsomal enzyme marker cytochrome c reductase. ROS prepared by discontinuous sucrose gradient centrifugation showed only 2-3% of whole homogenate PI synthetase or phosphatidyl: cytidyl transferase activities, and the distribution of activities was the same as for microsomal and mitochondrial marker enzymes. In the second study, whole retinas were incubated with myo-[2-3H]inositol or [2-3H]glycerol in vitro, and the time course of incorporation of radioactivity into PI and other phospholipids was determined for ROS and three other retinal fractions. Over a 10-hr period, the rate of incorporation of myo-[2-3H]inositol or [2-3H]glycerol into PI in ROS was lowest among the various retinal fractions. In the third study, chemical analysis of the molecular species composition of PI, DG and phosphatidic acid (PA) from ROS shows that PA is substantially different from PI and DG, the latter two being quite similar. These results are consistent with a precursor-product relationship between PI and DG, but not with the conversion of DG to PA or of PA to PI. Taken together, these three studies indicate that ROS do not have PI synthetase or phosphatidyl: cytidyl transferase activities, but do have DG, PI and PIP kinase activities. Thus, the PI in ROS lost through rapid turnover must be replaced with molecules derived from de novo synthesis in the inner segment of the photoreceptor cell.