In Dictyostelium discoideum extracellular cAMP induces chemotaxis via a transmembrane signal transduction cascade consisting of surface cAMP receptors, G-proteins and effector enzymes including adenylyl cyclase, guanylyl cyclase and phospholipase C. Previously it was demonstrated that some cAMP derivatives such as 3'-deoxy-3'-aminoadenosine 3':5'-monophosphate (3'NH-cAMP) bind to the receptor and induce normal activation of adenylyl cyclase and guanylyl cyclase. However these analogues do not induce chemotaxis, probably because the signal is transduced in an inappropriate manner. We have now studied the regulation of phospholipase C by cAMP and these chemotactic antagonists. cAMP induced the two-fold activation of phospholipase C leading to a transient increase of Ins(1,4,5)P3 levels. In contrast, the analogues induced a rapid decrease of intracellular Ins(1,4,5)P3 levels, due to the inhibition of phospholipase C activity. In a transformed cell-line lacking the G-protein that mediates phospholipase C inhibition, 3'NH-cAMP did not decrease phospholipase C activity and was no longer an antagonist of chemotaxis. These results suggest that inhibition of phospholipase C leads to aberrant chemotaxis.