Several hormones act at the cellular level to increase diacylglycerol via increased catabolism of phosphatidylinositol by phospholipase C. Diacylglycerol stimulates protein kinase C, leading to protein phosphorylation and hormone action. Since phospholipase C activity has not been well studied in man, we have established an assay for phospholipase C in human neutrophils. In this assay sonicates of neutrophils were incubated with L-3-phosphatidyl-[U 14C]-inositol and the incubation mixture extracted with chloroform/methanol. Following the additions of 2 mol/l KCl and chloroform, phospholipase C activity was determined by counting [14C] in the aqueous phase. The phospholipase C activity was linear with respect to time and the quantity of added enzyme. Optimum substrate concentration and pH were 2 mmol/l and 7.0, respectively. Optimal activity was dependent on Ca2+ (2 mmol/l) and deoxycholate (2 mmol/l). Naloxone, and PGD2, which affect various aspects of leucocyte function, had no significant effects on neutrophil PLC activity. The effects of various compounds with phospholipase A2 inhibitory activity were also tested on this enzyme. Of these, mepacrine, lidocaine and indomethacin inhibited the enzyme activity. The inhibition by indomethacin was of the noncompetitive type with an apparent Km of 0.17 X 10(-6) mol/l and apparent Ki of 3.6 X 10(-6) mol/l. From these data we conclude that indomethacin is capable of inhibiting phospholipase C activity in neutrophils at clinically significant levels and that this may be relevant in the therapeutic action of this drug.