Generation of PA (phosphatidic acid) by PLD (phospholipase D)-catalysed hydrolysis of phosphatidylcholine plays a pivotal role in cellular signalling pathways that regulate organization of the actin cytoskeleton, vesicular transport and exocytosis and stimulation of cell growth and survival. PLD regulation and function are intimately linked with phosphoinositide metabolism. Phosphatidyl 4-phosphate 5-kinase is stimulated by PA in vitro and this enzyme is the downstream effector of a significant subset of PLD signalling pathways. Yeast and mammalian PLDs are potently and specifically activated by the product of this kinase, PtdIns(4,5) P 2 , through interactions mediated by a polybasic motif within the catalytic core of the enzyme. Integrity of this motif is critical for agonist activation of mammalian PLD and for PLD function in secretion, sporulation and exocytosis in vivo . Although dispensable for catalysis in vitro , these PLD enzymes also contain N-terminal PH (pleckstrin) and PX (phox) homology domains. Binding studies using recombinantly expressed PLD fragments indicate that the PH and PX domains also interact specifically with distinct phosphoinositide ligands. Both the PX and PH domains are important for PLD function by controlling the dynamic association of the enzyme with the plasma membrane and its intracellular trafficking by the endocytic pathway. These results identify two distinct modes of regulation of PLD by phosphoinositides: stimulation of catalysis mediated by the polybasic domain and dynamic regulation of membrane targeting mediated primarily by the PH and PX domains.