The effect of different phospholipids on the kinetic behavior of phosphatidylinositol-specific phospholipase C (PI-PLC) from Bacillus thuringiensis toward PI vesicles has been investigated. Cosonicated PC/PI vesicles displayed enhanced hydrolysis of PI when less than 0. 20 mole fraction PC was incorporated into the vesicle; higher mole fractions of PC led to a decrease from the maximum activity mimicking surface dilution of substrate. Since the PC could affect PI-PLC binding to vesicles, the effect of separate PC vesicles on enzymatic hydrolysis of PI vesicles was examined. Separate phosphatidylcholine vesicles were found to activate PI-PLC-catalyzed cleavage of PI vesicles up to 7-fold. The activation was completely abolished when the PC vesicle was composed of cross-linked molecules. In the absence of enzyme, fluorescence resonance energy transfer studies did not detect any fusion between PI and PC vesicles if the total lipid concentration was below 2 mM. Higher total lipid concentrations (>20 mM) increased PC transfer between PC and PI vesicles, producing a PI vesicle population with small amounts of PC in the outer monolayer. This suggested that the activation of PI-PLC toward PI vesicles reflects the time scale of transfer of PC from PC vesicles to PI vesicles. Cosonicated PC/PI vesicles provide a measure of enzyme activity versus mole fraction of PC that can be used to estimate the extent of vesicle exchange or fusion between separate vesicle pools. The effects of other phospholipid vesicles on PI-PLC hydrolysis of PI were also examined; zwitterionic lipids were activators while anionic phospholipids inhibited activity. The results indicated that PC molecules in the PI interface allosterically bind to PI-PLC and help anchor enzyme in a more active conformation to the PI interface.