Large enhancements (maximum of 82-fold in terms of enzyme efficiency, Vmax/Km) of bacterial PI-PLC cyclic phosphodiesterase activity were observed in the presence of organic solvents miscible in water (dimethyl sulfoxide, dimethylformamide, and 2-propanol). In general, organic solvents lowered the Km for myo-inositol 1,2-cyclic phosphate (cIP) and increased Vmax substantially. This kinetic effect was similar to that obtained with phosphatidylcholine micelles and bilayers in an aqueous assay system for cyclic inositol phosphate hydrolysis [Zhou, C., et al. (1997) Biochemistry 36, 347-355]. Solvent properties were examined to determine which ones correlated with the activation of PI-PLC toward cIP in each solvent. Activation correlated best with the solvent polarity as measured by ET(30); no significant correlation was observed with solution surface tension, the bulk dielectric constant (epsilon), 1/epsilon (a measure of the strength of charge interactions), or the Hildebrand solubility parameter. The sigmoidal curve of the enzyme activity versus solvent polarity was consistent with the solvent promoting a transition in the enzyme from a low-activity to a high-activity form. Possible candidates for this change, including enzyme dimerization, helix B/loop stabilization, and dehydration of the active site, are discussed.