Blood platelets play an essential role in ischemic heart disease and stroke contributing to acute thrombotic events by release of potent inflammatory agents within the vasculature. Lysophosphatidic acid (LPA) is a bioactive lipid mediator produced by platelets and found in the blood and atherosclerotic plaques. LPA receptors on platelets, leukocytes, endothelial cells, and smooth muscle cells regulate growth, differentiation, survival, motility, and contractile activity. Definition of the opposing pathways of synthesis and degradation that control extracellular LPA levels is critical to understanding how LPA bioactivity is regulated. We show that intact platelets and platelet membranes actively dephosphorylate LPA and identify the major enzyme responsible as lipid phosphate phosphatase 1 (LPP1). Localization of LPP1 to the platelet surface is increased by exposure to LPA. A novel receptor-inactive sn-3-substituted difluoromethylenephosphonate analog of phosphatidic acid that is a potent competitive inhibitor of LPP1 activity potentiates platelet aggregation and shape change responses to LPA and amplifies LPA production by agonist-stimulated platelets. Our results identify LPP1 as a pivotal regulator of LPA signaling in the cardiovascular system. These findings are consistent with genetic and cell biological evidence implicating LPPs as negative regulators of lysophospholipid signaling and suggest that the mechanisms involve both attenuation of lysophospholipid actions at cell surface receptors and opposition of lysophospholipid production.