The activity of phospholipase D (PLD) is regulated by a variety of hormonal stimuli and provides a mechanistic pathway for response of cells to extracellular stimuli. The two identified mammalian PLD enzymes possess highly homologous C termini, which are required for catalytic activity. Mutational analysis of PLD1 and PLD2 reveals that modification of as little as the Cterminal threonine or the addition of a single alanine attenuates activity of the enzyme. Protein folding appears to be intact because mutant enzymes express to similar levels in Sf9 cells and addition of peptides representing the C-terminal amino acids, including the simple hexamer PMEVWT, restores partial activity to several of the mutants. Analysis of several mutants suggests a requirement for the hydrophobic reside at the ؊2-position but not an absolute requirement for the hydroxyl side chain of threonine at the C terminus. The inability of peptides amidated at their C termini to effect restoration of activity indicates the involvement of the C-terminal ␣ carboxyl group in functional activity of these enzymes. The ability of peptides to restore activity to PLD enzymes mutated at the C terminus suggests a flexible interaction of this portion of the molecule with a catalytic core constructed on conserved HKD motifs. Participation of these C termini residues in either stabilization of the catalytic site or the enzymatic reaction itself remains to be determined. This requirement for the C terminus provides an excellent potential site for interaction with regulatory proteins that may either enhance or down-regulate the activity of these enzymes in vitro.Phosphatidic acid plays a prominent role in phospholipid metabolism (1) and signal transduction. As a signaling molecule, phosphatidic acid is produced through the action of phospholipase D (PLD) 1 in response to a variety of cellular stimuli and acts directly as a second messenger or as a precursor for the formation of another second messenger, diacylglycerol (see Refs. 2-5 for reviews).Understanding of mechanisms by which mammalian PLD enzymes are regulated has been greatly accelerated by the development of a sensitive in vitro assay for the activity (6, 7) and identification of two mammalian genes (8 -10). The regulation of PLD activity in vitro allowed the identification of four distinct mechanisms for stimulation of the enzymes. Phosphatidylinositol 4,5-bisphosphate (PIP 2 ) was the first activator and a key element in establishing assays for the enzymes (6, 11-13). This was followed by the elucidation of activation by members of both the Arf (6, 14) and Rho (15-19) families of small monomeric GTPases and by classical isoforms of protein kinase C (PKC) via a phosphorylation independent pathway (20, 21). Subsequent studies with recombinant proteins in vitro have shown that PLD1 responds to all of these activators (22), while PLD2 is only stimulated by PIP 2 and Arf (9,23,24). Elucidation of these regulatory mechanisms and investigations to determine which of these pathways are utilized in the ce...