Phospholiapse D (PLD), and phosphatidic acid generated by it, have been implicated in receptor-mediated intracellular signaling. Carbachol (CCh) is known to activate PLD1, and protein kinase C (PKC) is known to mediate in this signaling pathway In recent reports (Kim et al., 1999b; Kim et al., 2000), we published our observations of the direct phosphorylation of PLD1 by PKC and we described the phosphorylation-dependent regulation of PLD1 activity. In this study, we investigated the phasphorylation and compartmentalization of PLD1 in terms of CCh signaling in M3 muscarinic receptor (M3R)-expressing COS-7 cells. CCh treatment of COS-7 cells transiently coexpressing PLD1 and M3R stimulated PLD1 activity and induced direct phosphorylation of PLD1 by PKC. The CCh-induced activation and phosphorylation of PLD1 was completely blocked upon pretreatment of the cells with PKC-specific inhibitors. We looked at the localization of the PLD1 phosphorylation by PKC and found that PLD1 was mainly located in the caveolin-enriched membrane (CEM) fraction. Based on these results, we conclude that CCh induces the activation and phosphorylation of PLD1 via PKC and that the phosphorylation of PLD1 occurs in caveolae.