The metabolic fate of endogenous diacylglycerol (DAG) in cultured A10 smooth muscle cells was determined. Preincubation of A10 cells with [3H]myristic acid or [3H]arachidonic acid resulted in preferential labeling of phosphatidylcholine (PC) or phosphatidylinositol (PI), respectively. Addition of PC-specific phospholipase C (PC-PLC) to [3H]myristate-labeled A10 cells resulted in a 10-fold increase in radiolabeled DAG, which was converted to monoacylglycerol (MG) and fatty acid (FA). DAG degradation and MG formation was inhibited by tetrahydrolipstatin, a DAG lipase inhibitor. PC-derived DAG was not converted to phosphatidic acid; in addition, PC resynthesis or triacylglycerol synthesis was not observed. Addition of PI-specific PLC (PI-PLC) to [3H]arachidonate-labeled A10 cells resulted in a modest increase in radiolabeled DAG that was also hydrolyzed to MG and FA. Therefore, the principal metabolic fate of endogenous DAG generated from membrane phospholipids by treatment of A10 cells with PC-PLC and PI-PLC was hydrolysis by a DAG lipase pathway.