The phosphatidylinositol-specific phospholipase C (PI-PLC) from mammalian sources catalyzes the simultaneous formation of both inositol 1,2-cyclic phosphate (IcP) and inositol 1-phosphate (IP). It has not been established whether the two products are formed in sequential or parallel reactions, even though the latter has been favored in previous reports. This problem was investigated by using a stereochemical approach. Diastereomers of 1,2-dipalmitoyl-sn-glycero-3-(1D- [16O,17O]phosphoinositol) ([16O,17O]DPPI) and 1,2-dipalmitoyl-sn-glycero-3-(1D-thiophosphoinositol) (DPPsI) were synthesized, the latter with known configuration. Desulfurization of the DPPsI isomers of known configurations in H2(18)O gave [16O,18O]DPPI with known configurations, which allowed assignment of the configurations of [16O,17O]DPPI on the basis of 31P NMR analyses of silylated [16O,18O]DPPI and [16O,17O]DPPI (the inositol moiety was fully protected in this operation). (Rp)- and (Sp)-[16O,17O]DPPI were then converted into trans- and cis-[16O,17O]IcP, respectively, by PI-PLC from Bacillus cereus, which had been shown to proceed with inversion of configuration at phosphorus [Lin, G., Bennett, F. C., & Tsai, M.-D. (1990) Biochemistry 29, 2747-2757]. 31P NMR analysis was again used to differentiate the silylated products of the two isomers of IcP, which then permitted assignments of IcP with unknown configuration derived from transesterification of (Rp)- and (Sp)-[16O,17O]DPPI by bovine brain PI-PLC-beta 1. The results indicated inversion of configuration, in agreement with the steric course of the same reaction catalyzed by PI-PLCs from B. cereus and guinea pig uterus reported previously. For the steric course of the formation of inositol 1-phosphate catalyzed by PI-PLC, (Rp)- and (Sp)-[16O,17O]DPPI were hydrolyzed in H2(18)O to afford 1-[16O,17O,18O]IP, which was then converted to IcP chemically and analyzed by 31P NMR. The results indicated that both B. cereus PI-PLC and the PI-PLC-beta 1 from bovine brain catalyze conversion of DPPI to IP with overall retention of configuration at phosphorus. These results suggest that both bacterial and mammalian PI-PLCs catalyze the formation of IcP and IP by a sequential mechanism. However, the conversion of IcP to IP was detectable by 31P NMR only for the bacterial enzyme. Thus an alternative mechanism in which IcP and IP are formed by totally independent pathways, with formation of IP involving a covalent enzyme-phosphoinositol intermediate, cannot be ruled out for the mammalian enzyme. It was also found that both PI-PLCs displayed lack of stereo-specifically toward the 1,2-diacylglycerol moiety, which suggests that the hydrophobic part of phosphatidylinositol is not recognized by PI-PLC.