The localization of phorbol ester-sensitive phospholipase D (PLD) in baby hamster kidney cells has been investigated by determining the subcellular distribution of the phosphatidylbutanol produced when the cells are incubated with phorbol 12-myristate 13-acetate and n-butanol. Results derived by isolation of plasma membrane vesicles from intact cells or by subcellular fractionation on a sucrose density gradient suggest the PLD is specific for phosphatidylcholine and its primary site of action is not the plasma membrane but the endoplasmic reticulum.