Phospholipase C (PLC) is a ubiquitous enzyme involved in the regulation of a variety of cellular processes. Its dependence on Ca2+ is well recognized, but it is not known how PLC activity is affected by physiological variations of the cytoplasmic Ca2+ concentration ([Ca2+](i)). Here, we applied evanescent wave microscopy to monitor PLC activity in parallel with [Ca2+](i) in individual insulin-secreting INS-1 cells using the phosphatidylinositol 4,5-bisphosphate- and inositol 1,4,5-trisphosphate-binding pleckstrin homology domain from PLCdelta(1) fused to green fluorescent protein (PHPLCdelta1-GFP) and the Ca2+ indicator fura red. In resting cells, PHPLCdelta1-GFP was located predominantly at the plasma membrane. Activation of PLC by muscarinic or purinergic receptor stimulation resulted in PHPLCdelta1-GFP translocation from the plasma membrane to the cytoplasm, detected as a decrease in evanescent wave-excited PHPLCdelta1-GFP fluorescence. Using this translocation as a measure of PLC activity, we found that depolarization by raising extracellular [K+] triggered activation of the enzyme. This effect could be attributed both to a rise of [Ca2+](i) and to depolarization per se, because some translocation persisted during depolarization in a Ca2+-deficient medium containing the Ca2+ chelator EGTA. Moreover, oscillations of [Ca2+](i) resulting from depolarization with Ca2+ influx evoked concentration-dependent periodic activation of PLC. We conclude that PLC activity is under tight dynamic control of [Ca2+](i). In insulin-secreting beta-cells, this mechanism provides a link between Ca2+ influx and release from intracellular stores that may be important in the regulation of insulin secretion.