A phosphatidylinositol-glycan has been implicated in the mechanism of action of insulin. Some of the actions of insulin may be mediated by the generation of the polar head group of this phosphatidylinositol-glycan. Localisation of the insulin-sensitive phosphatidylinositol-glycan was investigated by reacting the glycophospholipid with the imidoester [1-14C]-isethionyl acetimidate. The present results indicate that most of the insulin-sensitive phosphatidylinositol-glycan is localized at the plasma membrane of rat liver, being 85% of the glycophospholipid present at the outer surface of the cell. These results suggest a paracrine action of insulin.