Purified rat peritoneal mast cells stimulated with the polycationic histamine-releasing agent compound 48/80 demonstrated a two- to four-fold increase in cellular levels of 1,2-diacylglycerol (DAG) within 1 min as detected by radioactive labeling and direct quantitation experiments. When 2-[1-14C]arachidonoyl-DAG was incubated in the presence of mast-cell homogenates, a rapid conversion to free arachidonate, and to a lesser extent, to monoacylglycerol, triglyceride, and phospholipid was observed. The release of arachidonate was proportional to the amount of broken-cell preparation added and the time of incubation, was prevented by preheating mast-cell preparations, and did not occur when 1-[1-14C]arachidonoyl-phosphatidylcholine was used as substrate, suggesting that the degradation was mediated by an enzyme with Dag-lipase activity. Although much work remains to be done to clarify the precise role of DAG in mast cells, DAG metabolism may be involved in secretion by generating substances which may faciliate membrane fusion and also in arachidonic acid-derived mediator formation by liberating esterified arachidonic acid from mast-cell lipids. Taken together, these studies indicate that the formation of DAG may play a central role in mast-cell function.