Drosophilaphototransduction serves as a model for phosphoinositide (PI) signaling and for characterizing the mechanisms regulating transient receptor potential (TRP) channelsin vivo. Activation of TRP and TRP-like (TRPL) requires hydrolysis of phosphatidylinositol 4,5-bisphosphate (PIP2), resulting in the generation of inositol 1,4,5-trisphosphate (IP3) and diacylglycerol (DAG). Although a role for IP3has been excluded, TRP channels have been proposed to be activated by either a reduction of inhibitory PIP2or production of DAG/polyunsaturated fatty acids. Here, we characterize a protein, phosphatidylinositol synthase (dPIS), required for a key step during PIP2regeneration, the production of phosphatidylinositol. Overexpression of dPIS suppressed the retinal degeneration resulting from two other mutations affecting PIP2cycling,rdgB(retinal degeneration B) andcds(CDP-diacylglycerol synthase). To characterize the role of dPIS, we generated a mutation indpis, which represented the first mutation in a gene encoding a PI synthase in an animal. In contrast to other mutations that reduce PIP2regeneration, thedpis1mutation eliminated all PI synthase activity in flies and resulted in lethality. In mosaic animals, we found that dPIS was essential for maintaining the photoresponse. Because thedpis1mutation eliminates production of an enzyme essential for PIP2regeneration, our data argue against activation of TRP and TRPL through a reduction of inhibitory PIP2.