Final answer:
DAG and IP3 are crucial second messengers produced by the enzyme phospholipase C, leading to a cascade of cellular responses including the activation of protein kinase C and the release of Ca²+ from the endoplasmic reticulum.
Step-by-step explanation:
Diacylglycerol (DAG) and inositol triphosphate (IP3) are second messengers in cellular signal transduction pathways. These molecules are produced by the enzyme phospholipase C (PLC) when a hormone binds to a receptor and activates a G-protein. The activated PLC then cleaves phosphatidylinositol bisphosphate (PIP₂) to form DAG and IP3. DAG remains in the plasma membrane, activating protein kinase C (PKC), which phosphorylates serine and threonine residues on target proteins. IP3, on the other hand, diffuses into the cytoplasm, binds to ligand-gated calcium channels in the endoplasmic reticulum, and causes the release of Ca²+, further perpetuating the signal cascade.