Phospholipase C (PLC) is a class of membrane-associated enzymes that cleave phospholipids just before the phosphate group (see figure). It is most commonly taken to be synonymous with the human forms of this enzyme, which play an important role in eukaryotic cell physiology, in particular signal transduction pathways. Phospholipase C's role in signal transduction is its cleavage of phosphatidylinositol 4,5-bisphosphate (PIP₂) into diacyl glycerol (DAG) and inositol 1,4,5-trisphosphate (IP₃), which serve as second messengers. Activators of each PLC vary, but typically include heterotrimeric G protein subunits, protein tyrosine kinases, small G proteins, Ca²⁺, and phospholipids.

There are thirteen kinds of mammalian phospholipase C that are classified into six isotypes (β, γ, δ, ε, ζ, η) according to structure. Each PLC has unique and overlapping controls over expression and subcellular distribution. However, PLC is not limited to mammals, and is present in bacteria and Chromadorea as well.

The extensive number of functions exerted by the PLC reaction requires that it be strictly regulated and able to respond to multiple extra- and intracellular inputs with appropriate kinetics. This need has guided the evolution of six isotypes of PLC in animals, each with a distinct mode of regulation. The pre-mRNA of PLC can also be subject to differential splicing such that a mammal may have up to 30 PLC enzymes.

Most of the bacterial variants of phospholipase C are characterized into one of four groups of structurally related proteins. The toxic phospholipases C are capable of interacting with eukaryotic cell membranes and hydrolyzing phosphatidylcholine and sphingomyelin, leading to cell lysis.

The class of Chromadorea also uses the enzyme phospholipase C to regulate the releases of calcium. The enzyme releases inositol 1,4,5-trisphosphate (IP3) that denotes a signaling pathway involved in activating ovulation, the propelling of the oocyte into the spermatheca. This gene is involved in various activities like controlling GTPase, breaking down certain molecules, and binding to small GTPase. It helps in fighting bacteria and regulating protein movement in cells. It's found in the excretory system, intestines, nerves, and reproductive organs. The expression of the enzyme in the spermatheca is controlled by the transcription factors FOS-1 and JUN-1.

In mammals, PLCs share a conserved core structure and differ in other domains specific to each family. The core enzyme includes a split triosephosphate isomerase (TIM) barrel, pleckstrin homology (PH) domain, four tandem EF hand domains, and a C2 domain. The TIM barrel contains the active site, all catalytic residues, and a Ca²⁺ binding site. It has an autoinhibitory insert that interrupts its activity called an X-Y linker. The X-Y linker has been shown to occlude the active site, and with its removal, PLC is activated.

The genes encoding alpha-toxin (Clostridium perfringens), Bacillus cereus PLC (BC-PLC), and PLCs from Clostridium bifermentans and Listeria monocytogenes have been isolated and nucleotides sequenced. The sequences have significant homology, approximately 250 residues, from the N-terminus. Alpha-toxin has an additional 120 residues in the C-terminus. The C-terminus of the alpha-toxin has been reported as a "C2-like" domain, referencing the C2 domain found in eukaryotes that are involved in signal transduction and present in mammalian phosphoinositide phospholipase C.

The primary catalyzed reaction of PLC occurs on an insoluble substrate at a lipid-water interface. The residues in the active site are conserved in all PLC isotypes. In animals, PLC selectively catalyzes the hydrolysis of the phospholipid phosphatidylinositol 4,5-bisphosphate (PIP₂) on the glycerol side of the phosphodiester bond. There is the formation of a weakly enzyme-bound intermediate, inositol 1,2-cyclic phosphodiester, and release of diacylglycerol (DAG). The intermediate is then hydrolyzed to inositol 1,4,5-trisphosphate (IP₃). Thus the two end products are DAG and IP₃. The acid/base catalysis requires two conserved histidine residues and a Ca²⁺ ion is needed for PIP₂ hydrolysis. It has been observed that the active-site Ca²⁺ coordinates with four acidic residues and if any of the residues are mutated then a greater Ca²⁺ concentration is needed for catalysis.