The substrate requirement of phospholipids for hydrolysis with phospholipase C from Bacillus cereus was studied with synthetic lipids well-defined in structure and configuration. For optimal activity, the glycerol molecule must contain three substituents: phosphocholine in sn-3-, an ester bond in sn-2- and an ether- or ester bond in sn-1-position. The length of the ester or ether chains is of minor importance. Any deviation from these structural requirements results in a large decrease in the hydrolysis rate. These essential structural and configurational elements for optimal activity for the B. cereus enzyme are perfectly combined in the platelet activating factor, 1-O-hexadecyl-2-acetyl-sn-glycero-3- phosphocholine. This molecule is one of the best substrates for hydrolysis with the bacterial phospholipase C.