The mechanism by which cAMP modulates the activity of phosphoinositide-specific phospholipase C (PLC) was studied. Elevation of cAMP inhibited both basal and norepinephrine-stimulated phosphoinositide breakdown in C6Bu1 cells which contain at least three PLC isozymes, PLC-beta, PLC-gamma, and PLC-delta. Treatment of C6Bu1 cells with cAMP-elevating agents (cholera toxin, isobutylmethylxanthine, forskolin, and 8-bromo-cAMP) increased serine phosphate in PLC-gamma, but the phosphate contents in PLC-beta and PLC-delta were not changed. In addition, cAMP-dependent protein kinase selectively phosphorylated purified PLC-gamma among the three isozymes and added a single phosphate at serine. The serine phosphorylation, nevertheless, did not affect the activity of PLC-gamma in vitro. We propose, therefore, that the phosphorylation of PLC-gamma by cAMP-dependent protein kinase alters its interaction with putative modulatory proteins and leads to its inhibition.