We have attempted to elucidate the effect of thyroid hormone on phospholipase C-linked inositol phospholipid hydrolysis in the rat hypothalamus. Hypothalamic slices of each animal, euthyroid control, hypothyroid, and thyroxine (T4)-supplemented hypothyroid rats were labeled with [H-3]myo-inositol in the presence of 5 mM LiCl, and then incubated for 60 min in KHG buffer containing either vehicle or 1 mM ouabain, a Na-K ATPase inhibitor. Hypothyroidism caused a significant increase in both basal and ouabain-stimulated accumulation of [H-3]inositol phosphate ([H-3]IP) in hypothalamic slices, whereas supplement with T4 to hypothyroid rats resulted in a complete restoration of hypothalamic [H-3]IP formation to the value of euthyroid control. The present results indicate that thyroid hormone affects phospholipase C-linked inositol phospholipid hydrolysis in the hypothalamus, suggesting that negative feedback action of thyroid hormone may occur at a post-receptor site in the hypothalamus.