Activating the protein-tyrosine kinase of v-Src in BALB/c 3T3 cells results in rapid increases in the intracellular second messenger, diacylglycerol (DAG). v-Src-induced increases in radiolabeled DAG were most readily detected when phospholipids were prelabeled with myristic acid, which is incorporated predominantly into phosphatidylcholine. Consistent with this observation, v-Src increased the level of intracellular choline. No increase in DAG was observed when cells were prelabeled with arachidonic acid, which is incorporated predominantly into phosphatidylinositol. Inhibiting phosphatidic acid (PA) phosphatase, which hydrolyzes PA to DAG, blocked v-Src-induced DAG production and enhanced PA production, implicating a type D phospholipase. Consistent with the involvement of a type D phospholipase, v-Src increased transphosphatidylation activity, which is characteristic of type D phospholipases. Thus, v-Src-induced increases in DAG most likely result from the activation of a type D phospholipase/PA phosphatase-mediated signaling pathway.