In experiments carried out on the frog urinary bladder, it was found that 20 sec after vasopressin was added, the content of 1,2-di-acylglycerol, labelled with [3H]-arachidonic acid, increased by 44% and the content of [3H]-phosphatidylinositol-4,5-diphosphate (PIP2) decreased by 22%. Five minutes after hormone addition the amount of prostaglandin E (PGE) released into the serosal solution was increased three-fold. Preincubation of bladders in 10(-4) M neomycin led to a 26% increase in vasopressin-stimulated water flow, a block of PIP2 breakdown, and a reduction in PGE synthesis of 62%. A significant decrease in content of lipids labelled with [3H]-arachidonic acid was found in 1,2-diacylglycerol and phosphatidylethanolamine (diacyl form). The data obtained suggest that the role of PIP2 breakdown products in negative feed-back regulation of the hydroosmotic action of vasopressin at least in part includes their connection with PGE biosynthesis activation.