Platelet-activating factor (PAF) is a phospholipid with potent, diverse physiological actions, particularly as a mediator of inflammation. The synthesis, transport, and degradation of PAF are tightly regulated, and the biochemical basis for many of these processes has been elucidated in recent years. Many of the actions of PAF can be mimicked by structurally related phospholipids that are derived from nonenzymatic oxidation, because such compounds can bind to the PAF receptor. This process circumvents much of the biochemical control and presumably is regulated primarily by the rate of degradation, which is catalyzed by PAF acetylhydrolase. The isolation of cDNA clones encoding most of the key proteins involved in regulating PAF has allowed substantial recent progress and will facilitate studies to determine the structural basis for substrate specificity and the precise role of PAF in physiological events.