A fluorescent water-soluble substrate for phosphatidylinositol-specific phospholipase C was synthesized. The diacylglycerol moiety of the natural substrate, phosphatidylinositol, was replaced by the fluorescent moiety, 2-naphthol, resulting in the synthetic substrate, racemic 2-naphthyl myo-inositol-1-phosphate. The synthetic substrate provided a continuous fluorometric assay for the phosphatidylinositol-specific phospholipase C from Bacillus cereus. Initial rates of the cleavage of the 2-naphthyl substrate by the phospholipase measured by fluorometry were linear with time and the amount of enzyme added. The specific enzyme activity at pH 8.5 and 25 degrees C was about 0.04 mumol/min mg protein at an initial substrate concentration of 0.8 mM. 31P NMR experiments suggest that, as with phosphatidylinositol itself, cleavage of the fluorescent substrate proceeds in two steps via a myo-inositol-1,2-cyclic phosphate intermediate, and that only the D-isomer is a substrate for the B. cereus phospholipase. The synthetic substrate was stable during long-term storage as a solid in the dark at -20 degrees C. It was also stable for several weeks when stored in the dark frozen in aqueous solution near neutral pH.