Drosophila phototransduction serves as a model for phosphoinositide (PI) signaling and for characterizing the mechanisms regulating transient receptor potential (TRP) channels in 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 IP3 has been excluded, TRP channels have been proposed to be activated by either a reduction of inhibitory PIP2 or production of DAG/polyunsaturated fatty acids. Here, we characterize a protein, phosphatidylinositol synthase (dPIS), required for a key step during PIP2 regeneration, the production of phosphatidylinositol. Overexpression of dPIS suppressed the retinal degeneration resulting from two other mutations affecting PIP2 cycling, rdgB (retinal degeneration B) and cds (CDP-diacylglycerol synthase). To characterize the role of dPIS, we generated a mutation in dpis, which represented the first mutation in a gene encoding a PI synthase in an animal. In contrast to other mutations that reduce PIP2 regeneration, the dpis1 mutation 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 the dpis1 mutation eliminates production of an enzyme essential for PIP2 regeneration, our data argue against activation of TRP and TRPL through a reduction of inhibitory PIP2.