Lysophosphatidic acid (LPA) is a lipid mediator with diverse biological properties, although its synthetic pathways have not been completely solved. We report the cloning and characterization of a novel phosphatidic acid (PA)-selective phospholipase A(1) (PLA(1)) that produces 2-acyl-LPA. The PLA(1) was identified in the GenBank(TM) data base as a close homologue of phosphatidylserine (PS)-specific PLA(1) (PS-PLA(1)). When expressed in insect Sf9 cells, this enzyme was recovered from the Triton X-100-insoluble fraction and did not show any catalytic activity toward exogenously added phospholipid substrates. However, culture medium obtained from Sf9 cells expressing the enzyme was found to activate EDG7/LPA(3), a cellular receptor for 2-acyl-LPA. The activation of EDG7 was further enhanced when the cells were treated with phorbol ester or a bacterial phospholipase D, suggesting involvement of phospholipase D in the process. In the latter condition, an increased level of LPA, but not other lysophospholipids, was confirmed by mass spectrometry analyses. Expression of the enzyme is observed in several human tissues such as prostate, testis, ovary, pancreas, and especially platelets. These data show that the enzyme is a membrane-associated PA-selective PLA(1) and suggest that it has a role in LPA production.