1. Several growth factors important in liver regeneration and fibrosis stimulate phospholipase D in plasma membranes via a receptor/G-protein-coupled mechanism resulting in hydrolysis of phosphatidylcholine to phosphatidate. Phosphatidate can be further hydrolysed to diacylglycerol by phosphatidate phosphohydrolase. Phosphatidate and diacylglycerol can act as 'second-messengers' and regulation of phosphatidate phosphohydrolase activity could control the balance between them. 2. A form of phosphatidate phosphohydrolase, located in the plasma membrane and insensitive to inhibition by N-ethylmaleimide, has recently been identified that is distinct from the 'metabolic' form, which is present in the cytosol and microsomes and is sensitive to N-ethylmaleimide. 3. We have investigated the hypothesis that the balance between regeneration and fibrosis is, in part, determined by the activity of plasma membrane phosphatidate phosphohydrolase through its effect on the phosphatidate/diacylglycerol ratio. N-Ethylmaleimide-insensitive and -sensitive phosphatidate phosphohydrolase activities were measured in three hepatic conditions characterized by regeneration and/or fibrosis: alcoholic liver disease in humans (regeneration and fibrosis) and rat livers after either acute CCl-4-induced injury (regeneration) or common bile duct ligation (fibrosis). 4. In patients with alcoholic liver disease, N-ethylmaleimide-insensitive phosphatidate phosphohydrolase activity was higher in cirrhotic biopsies (5.82 +/- 0.3 nmol of Pi min-1 mg-1 of protein, n = 19) than in non-cirrhotic biopsies (2.17 +/- 0.2, n = 23) or in wedge biopsies from healthy subjects undergoing routine cholecystectomy (2.16 +/- 0.5, n = 6).(ABSTRACT TRUNCATED AT 250 WORDS)