Phosphatidylinositol-specific phospholipase C (PI-PLC) is involved in stress signalling but its signalling function remains largely unknown in crop plants. Here, we report that the PI-PLC4 from rice (Oryza sativa cv), OsPLC4, plays a positive role in osmotic stress response. Two independent knockout mutants, plc4-1 and plc4-2, exhibited decreased seedling growth and survival rate whereas overexpression of OsPLC4 improved survival rate under high salinity and water deficiency, compared with wild type (WT). OsPLC4 hydrolyses PI, phosphatidylinositol 4-phosphate (PI4P), and phosphatidylinositol-4,5-bisphosphate (PIP ) to generate diacylglycerol (DAG) in vitro. Knockout of OsPLC4 attenuated salt-induced increase of phosphatidic acid (PA) whereas overexpression of OsPLC4 decreased the level of PI4P and PIP under salt treatment. Applications of DAG or PA restored the growth defect of plc4-1 to WT but DAG kinase inhibitor 1 blocked the complementary effect of DAG in plc4-1 under salt stress. In addition, the loss of OsPLC4 compromised the increase of inositol triphosphate and free cytoplasmic Ca ([Ca ] ) and inhibited the induction of genes involved in Ca sensor and osmotic stress response to salt stress. The results indicate that OsPLC4 modulates the activity of two signalling pathways, PA and Ca , to affect rice seedling response to osmotic stress.