In the presence of arginine vasopressin (AVP), somatostatin increases [Ca 2ϩ ] i , leading to a transient increase in insulin release from clonal  cells HIT-T15 via G i/o and phospholipase C (PLC) pathway (Cheng et al., 2002a). The present study was to elucidate the mechanisms underlying somatostatin-induced [Ca 2ϩ ] i increase in the presence of AVP. We found that the effect of somatostatin was mediated by ␥ subunits but not by the ␣ subunit of G i/o . Because somatostatin alone failed to increase [Ca 2ϩ ] i , we hypothesized that somatostatin increases phosphatidylinositol 4,5-bisphosphate (PIP 2 ) synthesis, providing extra substrate for preactivated PLC- to generate inositol 1,4,5-trisphosphate (IP 3 ). Somatostatin alone did not increase IP 3 levels, but AVP ϩ somatostatin did. Somatostatin increased PIP 2 levels but decreased phosphatidylinositol 4-phosphate levels. We further hypothesized that PLD mediates somatostatin-induced changes in PIP 2 levels. Both the phospholipase D (PLD) inhibitors and antibody versus PLD1 antagonized AVPsomatostatin-induced increases in [Ca 2ϩ ] i . PLD inhibitor also antagonized somatostatin-induced increase in PIP 2 levels. In addition, somatostatin increased PLD activity. These results suggest that activation of somatostatin receptors that are coupled to the ␥ dimer of G i/o led to PLD1 activation, thus promoting the synthesis of phosphatidic acid. Phosphatidic acid activates PIP-5 kinase, which evokes an increase in PIP 2 synthesis. The PIP 2 generated by somatostatin administration increases substrate for preactivated phospholipase C-, which hydrolyzes PIP 2 to form IP 3 , leading to an increase in [Ca 2ϩ ] i .