Cells of the T cell hybridoma 23A4 produce IgE-binding factors lacking N-linked oligosaccharides (unglycosylated form) when they are incubated with IgE alone. In the presence of glycosylation-enhancing factor (GEF) or bradykinin, however, the same cells produce IgE-binding factors with N-linked oligosaccharides (glycosylated form). Switching the cells from the formation of unglycosylated IgE-binding factors to the formation of glycosylated factors was accompanied by the release of both glycosylation-inhibiting factor (GIF) in its phosphorylated form, i.e., phosphorylated lipomodulin, and arachidonate from the cells. Analysis of the biochemical processes for the release of GIF from 23A4 cells showed that affinity-purified GEF or bradykinin induced transient phospholipid methylation and diacylglycerol (DAG) formation, and enhanced 45Ca uptake into the cells. Inhibitors of methyltransferases, i.e., 3-deaza-adenosine plus L-homocysteine thiolactone, inhibited not only phospholipid methylation but also DAG formation and GIF release. Exogenously added 1-oleoyl-2-acetyl glycerol, i.e., a DAG that is permeable to the plasma membrane, induced the release of GIF from the cells. It was also found that 12-O-tetradecanoyl-phorbol 13-acetate (TPA) switched 23A4 cells and normal lymphocytes to the selective formation of N-glycosylated IgE-binding factor, and induced the release of GIF from the cells. 32PO4-labeled lipomodulin was detected in the extract of 23A4 cells 3 to 5 min after the addition of GEF, bradykinin, or TPA. These results indicate that GEF and bradykinin induced the activation of methyltransferases and phospholipase C for the formation of DAG, which in turn activated Ca2+-activated, phospholipid-dependent protein kinase (protein kinase C) for the phosphorylation of lipomodulin. Because lipomodulin loses phospholipase inhibitory activity after phosphorylation, increased phospholipase A2 activity would be expressed by this process.