1 The relationship between muscarinic receptor-mediated phosphatidylinositol 4,5-bisphosphate (PIP2) breakdown and the increase of intracellular Ca2+ ([Ca2+])i has been examined in canine cultured tracheal smooth muscle cells (TSMCs). 2 Addition of acetylcholine (ACh) and carbachol led to a 2-3 fold increase in [Ca2+]i over the resting level as determined by fura-2, with half-maximal stimulation (EC50) obtained at concentrations of 97 and 340 nm, respectively. Addition of the partial agonist, bethanechol, showed a smaller increase in PIP2 turnover and [Ca2]i than did ACh or carbachol. 3 Addition of ACh or carbachol to TSMCs that had been prelabelled with [H-3]-inositol led to the rapid (5-15 s) release of inositol mono, bis and trisphosphates IP1, IP2 and IP3. The time course of IP3 accumulation is correlated with the time course of the peak rise in [Ca2+]i. 4 Inclusion of EGTA lowered the resting [Ca2+]i and markedly reduced the extent of the agonist-induced rise in [Ca2+]i. When assayed under conditions similar to those used for the [Ca2+]i measurements, EGTA reduced the muscarinic agonist-stimulated inositol phosphates (IPs) accumulation. Conversely, ionomycin could stimulate IPs accumulation and elevate [Ca2+]i. The addition of Ca2+ (2.7-617 nM) to digitonin-permeabilized TSMCs directly stimulated IPs accumulation. 5 Both Ca2+ and guanosine-5'-O-(3-thiotriphosphate) (GTPTS) stimulated the formation of IPs in digitonin-permeabilized TSMCs prelabelled with [H-3]-inositol. A further calcium-dependent increase in IPs accumulation was obtained by inclusion of either GTPgammaS or carbachol. The combined presence of carbachol and GTPgammaS elicited a synergistic effect on IPs accumulation. with half-maximal stimulation observed at approximately 8 nM free Ca2+. 6 These results indicate that (i) the magnitude of the initial rise in [Ca2+]i is directly related to the production of IPs and (ii) the phospholipase C-mediated PIP, breakdown in TSMCs is sensitive to regulation by physiologically relevant concentrations of free Ca2+ ([Ca2+]i).