Inositol monophosphatase is unable to catalyse the exchange of O-18-label from O-18-water into inorganic phosphate in the absence of inositol. The inositol mediated exchange reaction is Mg2+ dependent, shows a similar pH dependence to that for the hydrolysis of myo-inositol 1-phosphate and is inhibited by lithium cation. These results suggest that the enzyme operates via a ternary complex mechanism unlike alkaline and acid phosphatase.