The biosynthesis of the functional, endogenous cyclic AMP antagonist, prostaglandylinositol cyclic phosphate (cyclic PIP) is performed by the plasma membrane-bound enzyme cyclic PIP synthase, which combines prostaglandin E (PGE) and activated inositol phosphate (n-IP) to cyclic PIP. The Km values of the enzyme for the substrates PGE and n-IP are in the micromolar range. The plasma membrane-bound synthase is activated by fluoride, by the stable GTP analog GMP-PNP, by protamine or biguanide, by noradrenaline, and by insulin. The activation by protamine or biguanide and fluoride (10 mM) is additive, which may indicate the presence of two different types of enzyme, comparable to phospholipase Cbeta and phospholipase Cgamma. Plasma membrane-bound cyclic PIP synthase is inhibited by the protein tyrosine kinase inhibitor tyrphostin B46 with an IC50 of 1.7 microM. However, the solubilized and gel-filtrated enzyme is no longer inhibited by tyrphostin, indicating that the activity of cyclic PIP synthase is connected with the activity of a membrane-bound protein tyrosine kinase. Cyclic PIP synthase activity of freshly prepared plasma membranes is unstable. Upon freezing and rethawing of liver plasma membranes, this instability is increased about 2-fold. Protein tyrosine phosphatase inhibitors [vanadate, fluoride (50-100 mM)] stabilize the enzyme activity, but protease inhibitors do not, indicating that inactivation of the enzyme is connected with protein tyrosine dephosphorylation. Cyclic PIP synthase is present in all tissues tested, like brain, heart, intestine, kidney, liver, lung, skeletal muscle, spleen, and testis. Apart from liver, cyclic PIP synthase activity in most tissues is rather low, but it can be increased up to 5-fold when protein tyrosine phosphatase inhibitors like vanadate are present in the homogenization buffer. Preincubation of cyclic PIP synthase of liver plasma membranes with the tyrosine kinase src kinase causes a 2-fold increase of cyclic PIP synthase activity, though this is certainly not the physiological role played by src kinase in intact cells. The data indicate that cyclic PIP synthase can be activated by two separate mechanisms: by a G protein or by protein tyrosine phosphorylation.