Phosphoinositide hydrolysis plays an important role in cellular signaling because it results in increased levels of calcium and diacylglycerols (DGs), which in turn activate protein kinase C (PKC). Agonist-induced hydrolysis of phosphatidylcholine (PtdCho) has been demonstrated, which also results in DG formation. However, it has not been clearly established whether PtdCho-derived DGs activate PKC in intact cells. We addressed this question directly, using α-thrombin stimulation of IIC9 fibroblasts as a model system. We show that DG produced from phosphoinositide, but not PtdCho hydrolysis, is associated with the activation of PKC. In addition, the methods used to quantify and chemically analyze agonist-induced changes in lipid levels, as well as PKC activation, are reviewed in detail.