Phosphoinositide-specific phospholipase C (PLC) is an important family of enzymes constituting a junction between phosphoinositide lipid signaling and the trans-membrane signal transduction processes that are crucial to many living cells. However, the regulatory mechanism of PLC is not yet understood in detail. To address this issue, activity studies were carried out using lipid vesicles in a model system that was specifically designed to study protein-protein and lipid-protein interactions in concert. Evidence was found for a direct interaction between PLC and the GTPases that mediate phospholipase activation. Furthermore, for the first time, the relationships between PLC activity and substrate presentation in lipid vesicles of various sizes, as well as lipid composition and membrane mechanical properties, were analyzed. PLC activity was found to depend upon the electrostatic potential and the stored curvature elastic stress of the lipid membranes.