Chromaffin cells from bovine adrenal medulla secrete catecholamines on stimulation with acetylcholine. In addition to the activation of the phosphatidylinositol cycle, arachidonic acid is generated, which was thought to be the result of phospholipase A2 activation. We have demonstrated in isolated plasma membranes of these cells that arachidonic acid is generated by a two-step reaction of diacylglycerol and monoacylglycerol lipase splitting diacylglycerol, which originates from the action of phospholipase C on phosphatidylinositols. No phospholipase A2 activity could be detected in plasma membranes so far. External addition of arachidonic acid increases the release in the absence and in the presence of agonist. Inhibition of the diacylglycerol lipase by RHC 80267 suppresses the catecholamine release, which is restored on addition of arachidonic acid. This effect, however, is reversed by lipoxygenase inhibitors, indicating that it is not arachidonic acid itself, but one of its lipoxygenase products, that is essential for inducing exocytosis.