Lung surfactant is the surface-active agent comprised of phospholipids and proteins that lines pulmonary alveoli. Surfactant stabilizes the alveolar volume by reducing surface tension. Previously, we identified a lysosomal phospholipase A2, termed LPLA2, with specificity toward phosphatidylcholine and phosphatidylethanolamine. The phospholipase is localized to lysosomes, is calcium-independent, has an acidic pH optimum, and transacylates ceramide. Here, we demonstrate that LPLA2 is selectively expressed in alveolar macrophages but not in peritoneal macrophages, peripheral blood monocytes, or other tissues. Other macrophage-associated phospholipase A2s do not show a comparable distribution. LPLA2 is of high specific activity and recognizes disaturated phosphatidylcholine as a substrate. The lysosomal phospholipase A2 activity is six times lower in alveolar macrophages from mice with a targeted deletion of the granulocyte macrophage colonystimulating factor (GM-CSF), a model of impaired surfactant catabolism, compared with those from wild-type mice. However, LPLA2 activity and protein levels are measured in GM-CSF null mice in which GM-CSF is expressed as a transgene under the control of the surfactant protein C promoter. Thus LPLA2 may be a major enzyme of pulmonary surfactant phospholipid degradation by alveolar macrophages and may be deficient in disorders of surfactant metabolism.Previously, in an attempt to identify the enzyme that transacylates ceramide at the 1-hydroxyl position, a novel phospholipase A2 was characterized (1). The phospholipase A2, termed 1-O-acylceramide synthase or lysosomal phospholipase A2 (LPLA2) 1 has the following properties. In the presence of ceramide, the enzyme catalyzes the formation of 1-O-acylceramide by transacylation of fatty acids from the sn-2 position of phosphatidylcholine or phosphatidylethanolamine. In the absence of ceramide or other alcohols as acceptors, the enzyme acts as a traditional phospholipase A2. However, the phospholipase has a pH optimum of 4.5 and is mannose-rich and calcium-independent (2). The phospholipase amino acid sequence is 49% identical to human LCAT (3). The homology with LCAT is highest within the catalytic domain, but the phospholipase does not recognize cholesterol as an acceptor for the fatty acid. The phospholipase colocalizes with other lysosomal proteins in cell fractionates. Upon the initial characterization of this enzyme, the functional role of this phospholipase A2 was not immediately apparent. A role for an acidic phospholipase A2 activity has previously been suggested for the degradation of pulmonary surfactant phospholipids (4). The pulmonary acidic phospholipase A2 activity is also reported to be calcium-independent and inhibited by a transition state analog of arachidonate, MJ33 (5). In rats treated with MJ33 the surfactant phospholipid catabolism was inhibited by ϳ40 -50%, suggesting that the drug-sensitive phospholipase A2 activity contributes significantly to total surfactant degradation (6). In the present paper LPLA2 was stu...