All family members are capable of catalyzing the hydrolysis of PIP, a phosphatidylinositol at the inner leaflet of the plasma membrane into the two second messengers, inositol trisphosphate (IP) and diacylglycerol (DAG).
The chemical reaction may be expressed as:
:1-phosphatidyl-1-myo-inositol 4,5-bisphosphate + HO -myo-inositol 1,4,5-trisphosphate + diacylglycerol
PLCs catalyze the reaction in two sequential steps. The first reaction is a phosphotransferase step that involves an intramolecular attack between the hydroxyl group at the 2 position on the inositol ring and the adjacent phosphate group resulting in a cyclic IP intermediate. At this point, DAG is generated. However, in the second phosphodiesterase step, the cyclic intermediate is held within the active site long enough to be attacked by a molecule of water, resulting in a final acyclic IP product. It should be mentioned that bacterial forms of the enzyme, which contain only the catalytic lipase domain, produce cyclic intermediates exclusively, whereas the mammalian isoforms generate predominantly the acyclic product. However, it is possible to alter experimental conditions (e.g., temperature, pH) in vitro' such that some mammalian isoforms will alter the degree to which they produce mixtures of cyclic/acyclic products along with DAG. This catalytic process is tightly regulated by reversible phosphorylation of different phosphoinositides and their affinity for different regulatory proteins.