Recently, we have demonstrated that carbachol, a cholinergic agonist, stimulates the hydrolysis of phosphoinositides (PI) in the inner medullary (IM) slices from the rabbit kidney. In order to localize the effects of carbachol in the IM, we measured PI hydrolysis in IM collecting duct (CD) cells which form approximately 50% of the IM and play an important role in determining the final composition of the urine. The IMCD cells were prepared from IM slices of the rabbit kidney by treatment with collagenase followed by addition of water to lyse the cells other than IMCD cells. To measure PI hydrolysis, the IMCD cells were incubated with [3H]inositol for its incorporation into PI before measurement of inositol phosphates (IP) released and accumulated in the presence of LiCl which prevents the dephosphorylation of IP. Carbachol (1 mM) produced greater than 16-fold increase in the release of IP (from 1.53 +/- 1.34% in control to 26.26 +/- 4.59% in drug-treated) in the isolated IMCD cells. The effect was concentration-dependent with an EC50 (50% maximum effective concentration) of 4 microM carbachol. Carbachol-stimulated PI hydrolysis was blocked completely by 1 microM atropine, a muscarinic antagonist, and not by 1 microM hexamethonium, a nicotinic antagonist. The nicotinic agonist, 1,1-dimethyl-4-phenylpiperazinium iodide (1 mM), had no significant effect on PI hydrolysis in the IMCD cells. We conclude that the stimulation of PI hydrolysis by cholinergic agents in the IMCD cells occurs through their interaction with muscarinic receptors and this process may play a role in the diuretic and natriuretic effects of these agents.