The generation of second messengers from the hydrolysis of phosphatidylinositol-4,5-bisphosphate (PtdInsP2) by phosphoinositidase C has been implicated in the mediation of cellular responses to a variety of growth factors and oncogene products. The first step in the production of PtdInsP2 from phosphatidylinositol (PtdIns) is catalysed by PtdIns kinase. A PtdIns kinase activity has been found to associate specifically with several oncogene products, as well as with the platelet-derived growth factor (PDGF) receptor. We have previously identified two biochemically distinct PtdIns kinases in fibroblasts, and have found that only one of these, designated type I, specifically associates with activated tyrosine kinases. We have now characterized the site on the inositol ring phosphorylated by type I PtdIns kinase, and find that this kinase specifically phosphorylates the D-3 ring position to generate a novel phospholipid, phosphatidylinositol-3-phosphate (PtdIns(3)P). In contrast, the main PtdIns kinase in fibroblasts, designated type II, specifically phosphorylates the D-4 position to produce phosphatidylinositol-4-phosphate (PtdIns(4)P), previously considered to be the only form of PtdInsP. We have also tentatively identified PtdIns(3)P as a minor component of total PtdInsP in intact fibroblasts. We propose that type I PtdIns kinase is responsible for the generation of PtdIns(3)P in intact cells, and that this novel phosphoinositide could be important in the transduction of mitogenic and oncogenic signals.