In Saccharomyces cerevisiae, cAMP-dependent phosphorylation plays an essential role at the start of the cell cycle. It has also recently been demonstrated that the breakdown of phosphatidylinositol 4,5-bisphosphate to inositol 1,4,5-trisphosphate and diacylglycerol is a requisite process for cell proliferation (Uno, I., Fukami, K., Kato, H., Takenawa, T., and Ishikawa, T. (1988) Nature 333, 188-190). To clarify the relationship between the cAMP- and inositol phospholipid-mediated signal transduction systems, alterations in the inositol phospholipid metabolism of cAMP mutants were examined. The incorporation of [32P]Pi into phosphatidylinositol 4-phosphate (PIP) and phosphatidylinositol 4,5-bisphosphate (PIP2) was markedly reduced in ras2, which produces low levels of cAMP, and increased in bcy1, which produces cAMP-independent protein kinase. The incorporation of [32P]Pi into ATP and phosphatidylinositol (PI) was almost the same in wild type, ras1, ras2, and bcy1 yeast strains. The addition of exogenous cAMP to cyr1-2 caused a tremendous increase in [32P]Pi incorporation into PIP and PIP2 without any effect on incorporation into ATP and PI, suggesting that cAMP plays an important role in polyphosphoinositide synthesis. We therefore examined the activities of PI and PIP kinases, the enzymes that catalyze the sequential steps from PI to PIP2 via PIP. The activities of both kinases were found to be very low in the membranes of cry1-2 and ras2 but very high in the membranes of bcy1 and ras1 ras2 bcy1 strain cells. The addition of cAMP to cyr1-2 cells caused the activation of PI and PIP kinases. Furthermore, the treatment of membranes with cAMP or dibutyryl cAMP caused the activation of PI kinase in wild type, ras1, cry1-2, and ras2 strains, but not in bcy1 strain cells. The effect was most prominent in membranes from cyr1-2 and ras2 cells. These results show that cAMP-dependent phosphorylation enhances polyphosphoinositide synthesis through activation of PI and PIP kinase, an effect which may lead to the enhanced production of inositol 1,4,5-trisphosphate and diacylglycerol.