Activation of a variety of cell surface receptors results in a biphasic increase in the cytoplasmic Ca2+ concentration, due to the release, or mobilization, of intracellular Ca2+ stores and to the entry of Ca2+ from the extracellular space. Stimulation of these same receptors also results in the phospholipase-C-catalysed hydrolysis of the minor plasma membrane phospholipid, phosphatidylinositol 4,5-bisphosphate, with the concomitant formation of inositol 1,4,5-trisphosphate [Ins(1,4,5)P3] and diacylglycerol. Analogous to the adenylyl cyclase signalling system, receptor-mediated stimulation of phospholipase C also appears to occur through one or more intermediary guanine nucleotide-dependent regulatory proteins. It is well established that phosphatidylinositol 4,5-bisphosphate hydrolysis is responsible for the changes in Ca2+ homeostasis. There is strong evidence that Ins(1,4,5)P3 stimulates Ca2+ release from intracellular stores. The Ca2+-releasing actions of Ins(1,4,5)P3 are terminated by its metabolism through two distinct pathways. Ins(1,4,5)P3 is dephosphorylated by a 5-phosphatase to Ins(1,4)P2; alternatively, Ins(1,4,5)P3 can also be phosphorylated to Ins(1,3,4,5)P4 by a 3-kinase. Whereas the mechanism of Ca2+ mobilization is understood, the precise mechanisms involved in Ca2+ entry are not known; a recent proposal that Ins(1,4,5)P3 by emptying an intracellular Ca2+ pool, secondarily elicits Ca2+ entry will be considered. This review summarizes our current understanding of the mechanisms by which inositol phosphates regulate cytoplasmic Ca2+ concentrations.