We have characterized a membrane-bound phosphatidylcholine (PC) specific phospholipase C (PC-PLC) in plasma membranes from rat cardiac muscle, and have investigated the role of PC-PLC and PC-specific phospholipase D (PC-PLD) activities in the mechanism of action of atrial natriuretic factor (ANF). In purified sarcolemma, ANF stimulated over a wide range of concentrations with a maximum at 10(-11) M the hydrolysis of phosphatidylcholine through PC-PLD giving phosphatidate and choline, whereas higher concentrations of ANF (10(-10) M) preferentially stimulated PC breakdown through PC-PLC to form diacylglycerol and phosphocholine. To confirm the involvement of the PC-PLD in the mechanism of ANF action, we measured the transphosphatidylation reaction, a specific assay for this phospholipase which in the presence of ethanol catalyses the phosphatidylethanol formation from PC. ANF stimulated phosphatidylethanol formation with the same dose-response behavior as phosphatidate formation. The significant diacylglycerol increase at 10(-10) M ANF, in the presence of propranolol, a potent inhibitor of phosphatidate phosphatase which can hydrolyse phosphatidate to give diacylglycerol, suggested a direct involvement of PC-PLC. The use of GTP-gamma-S, a non hydrolysable analog of GTP, and of pertussis toxin showed the involvement of a pertussis toxin insensitive G protein in PC-PLC mediated ANF signal transduction. We suggest a differential effect of ANF on PC breakdown by phospholipases C and D depending on the concentration of the peptide.