A new substrate analogue, (2R)-1,2-dipalmitoyloxypropanethiophospho-1-D-myo-inositol (DPsPI), has been used in a new, continuous assay for phosphatidylinositol-specific phospholipase C (PI-PLC). DPsPI is superior to other substrate analogs that have been used for assaying PI-PLC since it is synthesized as a pure diastereomer and maintains both acyl chains of the natural substrate, dipalmitoylphosphatidylinositol (DPPI). The assay that has been developed using this new analogue has allowed us to elucidate detailed kinetic data so far lacking in the field. In addition, several mutants of PI-PLC were constructed and assayed. The results show that Arg-69 is essential for catalysis, since mutations at this position led to a 10(3)- 10(4)-fold decrease in activity with respect that of to the wild-type (WT) enzyme. An alanine mutant of Asp-67, a residue also found at the active site, displays activity similar to that of WT. We have also used nuclear magnetic resonance (NMR) and circular dichroism (CD) spectroscopy to analyze the structural integrity and conformational stability of the mutants. The results show that the overall global conformation of the enzyme is not perturbed by the mutants. The 15N-1H HSQC NMR spectrum of WT PI-PLC is also reported at 600 MHz. The stereoselectivity of the reaction toward the stereoisomers of another analogue, 1,2-dipalmitoyl-sn-glycero-3-thiophospho-1-myo-inositol (DPPsI), was used to probe whether Arg-69 interacts with the phosphate moiety of the substrate. We have calculated that the WT enzyme shows a stereoselectivity ratio of 160000:1 in favor of the Rp isomer versus the Sp isomer. The R69K mutant displayed a significant 10(4)-fold relaxation of stereoselectivity. Our data support the role of Arg-69 in stabilizing the negative charge on the pentacoordinate phosphate in the transition state during catalysis.