The amount of lipid decreased markedly at the later stage of embryonic development, coinciding with the remarkable decrease in yolk weight. 2. Phospholipase C activity in the yolk sac appeared on the 6th day of incubation and increased markedly as incubation proceeded. 3. The enzyme showed its optimum activity at pH 9.5 and at 40 degrees C. 4. The activity was enhanced 2-fold by 20 mM CaCl2 and by 40% by 4 mM deoxycholate but inhibited by 2 mM ZnCl2 and CuSO4.