The 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 Ca2+ from intracellular stores and to the entry of Ca2+ from the extracellular space. It is well established that phosphatidylinositol 4,5-bisphosphate hydrolysis is responsible for the changes in Ca2+ homeostasis. Stimulation of Ca2(+)-mobilizing receptors also results in the phospholipase C-catalyzed hydrolysis of the minor plasma membrane phospholipid, phosphatidylinositol 4,5-bisphosphate, with the concomitant formation of inositol (1,4,5) trisphosphate [1,4,5)IP3) and diacylglycerol. Analogous to the adenylyl cyclase signaling system, receptor-mediated stimulation of phospholipase C also appears to be mediated by one or more intermediary guanine nucleotide-dependent regulatory proteins. There is strong evidence that (1,4,5)IP3 stimulates Ca2+ release from intracellular stores. The Ca2(+)-releasing actions of (1,4,5)IP3 are terminated by its metabolism through two distinct pathways. (1,4,5)IP3 is dephosphorylated by a 5-phosphatase to inositol (1,4) bisphosphate; alternatively, (1,4,5)IP3 can be phosphorylated to inositol (1,3,4,5) tetrakisphosphate 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 (1,4,5)IP3 secondarily elicits Ca2+ entry by emptying an intracellular Ca2+ pool will be considered. This review summarizes our current understanding of the mechanisms by which inositol phosphates regulate cytoplasmic Ca2+ concentrations.