The phosphoinositide (PI) intracellular signaling pathway, which triggers Ca2+ release from intracellular stores, appears to be a central feature of phototransduction in most invertebrate species studied. Procedures designed to inhibit PI-pathway reactions cause suppression of excitation to dim lights. However, in Limulus photoreceptors, responses to bright stimuli are in fact enhanced by some of these procedures, suggesting that PI metabolism is not obligatory for light-induced excitation. Other studies, however, suggest that Ca2+ release is obligatory for excitation. We studied this issue by examining the effects of PI-pathway inhibitor, Li+, on electrophysiological responses to light in Limulus photoreceptors. Li+ is reported to cause depletion of intracellular PI-pathway intermediate, inositol; and it offers the pharmacological advantage that its block can be bypassed by introducing exogenous inositol. Introduction of Li+ caused a very slowly developing but complete suppression of responses to dim stimuli. In contrast, Li+ caused a rapidly developing but partial suppression of responses to bright stimuli. Li+-induced suppression was reversed by exogenous introduction of inositol. In addition, inositol prevented Li+-induced suppression of excitation. Li+ enhanced light adaptation (light-induced desensitization) but slowed response deactivation, indicating a difference in the processes underlying these phenomena. Li+ slowed dark adaptation, the recovery of sensitivity following light adaptation. All of these effects were prevented or rescued by extracellularly applied inositol, suggesting the presence of a transmembrane inositol transport system. The overall results suggest that PI-dependent signaling is central and obligatory for excitation in Limulus, at least for responses to dim to moderate illumination. The failure of Li+ to suppress bright light-induced excitation completely may be due to a failure of Li+ to block PI metabolism completely, as in other systems; however, it may point to a parallel, PI-independent excitation pathway possessing very low light sensitivity when PI metabolism is inhibited.