When membrane-bound human liver alkaline phosphatase was treated with a phosphatidylinositol (PI) phospholipase C obtained from Bacillus cereus, or with the proteases ficin and bromelain, the enzyme released was dimeric. Butanol extraction of the plasma membranes at pH 7.6 yielded a water-soluble, aggregated form that PI phospholipase C could also convert to dimers. When the membrane-bound enzyme was solubilized with a non-ionic detergent (Nonidet P-40), it had the Mr of a tetramer; this, too, was convertible to dimers with PI phospholipase C or a protease. Butanol extraction of whole liver tissue at pH 6.6 and subsequent purification yielded a dimeric enzyme on electrophoresis under nondenaturing conditions, whereas butanol extraction at pH values of 7.6 or above and subsequent purification by immunoaffinity chromatography yielded an enzyme with a native Mr twice that of the dimeric form. This high molecular weight form showed a single Coomassie-stained band (Mr = 83,000) on electrophoresis under denaturing conditions in sodium dodecyl sulfate, as did its PI phospholipase C cleaved product; this Mr was the same as that obtained with the enzyme purified from whole liver using butanol extraction at pH 6.6. These results are highly suggestive of the presence of a butanol-activated endogenous enzyme activity (possibly a phospholipase) that is optimally active at an acidic pH. Inhibition of this activity by maintaining an alkaline pH during extraction and purification results in a tetrameric enzyme. Alkaline phosphatase, whether released by phosphatidylinositol (PI) phospholipase C or protease treatment of intact plasma membranes, or purified in a dimeric form, would not adsorb to a hydrophobic medium. PI phospholipase C treatment of alkaline phosphatase solubilized from plasma membranes by either detergent or butanol at pH 7.6 yielded a dimeric enzyme that did not absorb to the hydrophobic medium, whereas the untreated preparations did. This adsorbed activity was readily released by detergent. Likewise, alkaline phosphatase solubilized from plasma membranes by butanol extraction at pH 7.6 would incorporate into phosphatidylcholine liposomes, whereas the enzyme released from the membranes by PI phospholipase C would not incorporate. The dimeric enzyme purified from a butanol extract of whole liver tissue carried out at pH 6.6 did not incorporate. We conclude that PI phospholipase C converts a hydrophobic tetramer of alkaline phosphatase into hydrophilic dimers through removal of the 1,2-diacylglycerol moiety of phosphatidylinositol. Based on these and others' findings, we devised a model of alkaline phosphatase's conversion into its various forms.