1. A novel anti-inflammatory peptide (residues 204-212) of human recombinant lipocortin 5 (hrLC5) found on the high similarity region with uteroglobin is described. 2. Peptide 204-212 dose-dependently inhibited the contractions of rat isolated stomach strips elicited by porcine pancreatic phospholipase A2 (PLA2). Contractions caused by arachidonic acid (AA), prostaglandin E2 (PGE2) and 5-hydroxytryptamine were not affected. No direct enzyme inhibition was observed in a radiochemical assay. 3. PGE2 release by both human fibroblasts and rat macrophages was reduced by peptide 204-212 in a dose-dependent manner. 4. The development of carrageenin-induced oedema in rats was significantly inhibited by the local administration of peptide 204-212. 5. The pattern and potency of the biological effects of peptide 204-212 are similar to those of antiflammin 2, a lipocortin 1-derived peptide. 6. It is suggested that peptide 204-212 may represent the active site responsible for the anti-inflammatory properties of lipocortin 5.