Phospholipase C (Clostridium welchii and Bacillus cereus) treatment of lactating rabbit mammary gland membranes (140,000 g pellet and sucrose density gradient purified plasma membranes) resulted in a large decrease in the binding of [3H]oxytocin to these subcellular fractions. This decrease was not due to a solubilization of oxytocin receptors but was the result of the removal of phospholipids which may participate in the hormone-receptor interaction. Phospholipase C treatment of the membrane fractions resulted in a dose-dependent removal of different classes of phospholipids. Sphingomyelin, phosphatidylcholine and phosphatidylethanolamine were removed by phospholipase C (C. welchii and B. cereus) treatment. No significant change was observed in the content of phosphatidylinositol. Phospholipase C from B. cereus reduced the content of phosphatidylserine, while the enzyme from C. welchii did not.