The influence of phospholipids on the activity of the soluble phosphatidate phosphohydrolase from rat liver was studied. Phosphatidylethanolamine stimulated the enzyme activity whereas phosphatidylglycerol, phosphatidylserine, and phosphatidylinositol were inhibitory. At a phospholipid concentration of 0.7 mg/ml, phosphatidylglycerol inhibited phosphatidate phosphohydrolase activity by 75%, while the enzyme activity was stimulated twofold in the presence of phosphatidylethanolamine. Both lysophosphatidylglycerol and lysophosphatidylethanolamine inhibited phosphatidate phosphohydrolase activity as did octylglucoside, sodium cholate, and Tween 20. The finding that phospholipids influence hepatic phosphatidate phosphohydrolase activity indicates that changes in the lipid environment may modulate the enzyme activity.