Cleavage of the polyphosphoinositides, catalyzed by phospholipase C purified from ram seminal vesicles, produces phosphorylated inositols containing cyclic phosphate esters (Wilson, D. B., Bross, T. E., Sherman, W. R., Berger, R. A., and Majerus, P. W. (1985) Proc. Natl. Acad. Sci. U. S. A. 82, 4013-4017). In the present study we describe the isolation and characterization of inositol 1:2-cyclic 4-bisphosphate and inositol 1:2-cyclic 4,5-trisphosphate, the two cyclic phosphate products of phospholipase C catalyzed cleavage of phosphatidylinositol 4-phosphate and phosphatidylinositol 4,5-bisphosphate, respectively. We established the structures of these two cyclic compounds through 18O labeling of phosphate moieties, phosphomonoesterase digestion, and fast atom bombardment-mass spectrometry. We examined the physiological effects of these compounds in two systems: saponin-permeabilized platelets loaded with 45Ca2+ and intact Limulus photoreceptors. Both inositol 1:2-cyclic 4,5-trisphosphate and the noncyclic inositol 1,4,5-trisphosphate, but not inositol 1:2-cyclic 4-bisphosphate, release 45Ca2+ from permeabilized platelets in a concentration-dependent manner. Injection of inositol 1:2-cyclic 4,5-trisphosphate into Limulus ventral photoreceptor cells induces both a change in membrane conductance and a transient increase in intracellular calcium ion concentration similar to those induced by light. We injected inositol 1,4,5-trisphosphate and inositol 1:2-cyclic 4,5-trisphosphate into the same photoreceptor cell and found that the cyclic compound is approximately five times more potent than the noncyclic compound in stimulating a conductance change. We speculate that inositol 1:2-cyclic 4,5-trisphosphate may function as a second messenger in stimulated cells.