The social amoeba Dictyostelium discoideum exhibits high activities of phospholipase and lysophospholipase [Ferber, Munder, Fischer and Gerisch (1970) Eur. J. Biochem. 14, 253-257]. We assayed Dictyostelium lysates to demonstrate the presence of a highly active phospholipase B (PLB) enzyme that removed both fatty-acid chains from phosphatidylcholine and produced the water-soluble glycerophosphorylcholine. We purified the PLB activity from Dictyostelium cytosol using standard agarose media (size exclusion and ion exchange), and combined this with an affinity purification step using myristoylated ARF1 (ADP-ribosylation factor 1), a protein which has a single fatty acid at its N-terminus. Two proteins co-purified (48 kDa and 65 kDa), and the 48 kDa protein was digested with trypsin, peptide fragments were separated by reverse-phase chromatography, and the resultant peptides were sequenced by Edman degradation. From the peptide sequences obtained, database searches revealed a gene which encodes a protein of 65 kDa with unknown function. The 48 kDa protein therefore appears to be a fragment of the full-length 65 kDa product. Expression of the gene in Escherichia coli confirmed that it encodes a PLB. Characterization of its substrate specificity indicated that, in addition to phosphatidylcholine deacylation, the enzyme also hydrolysed phosphatidylinositol and phosphatidylethanolamine. The PLB identified in the present study is not related to existing PLBs found in bacteria, fungi or mammals. There are, however, genes similar to Dictyostelium PLB in mammals, flies, worms and Giardia, but not in yeast. We therefore have identified a novel family of intracellular PLBs.