This investigation was designed to confirm the presence of PA phosphohydrolase in human neutrophils and to determine the distribution and characteristics of the enzyme in soluble and particulate subcellular fractions of disrupted neutrophils. Enzyme activity was detected in unseparated extracts of sonicated neutrophils. The majority of the recovered activity was recovered in a particulate fraction rich in neutrophil plasma-membrane markers; moderate levels (20%) of the total activity were recovered in the cytosol. While Mg2+ markedly potentiated the cytosolic but not the particulate activity, Ca2+ moderately inhibited both the cytosolic and particulate enzymes. The plasma-membrane-associated activity was absolutely dependent on detergent (0.5% Triton X-100) and displayed an apparent Km of 62 microM for phosphatidic acid. Enzyme activity was markedly inhibited by NaF, not influenced by excess glycerophosphate and slightly attenuated by propranolol, an inhibitor of PA phosphohydrolase in other systems. Preincubation of plasma membranes with N-ethylmaleimide at concentrations up to 25 mM had little effect on enzyme activity. However, activity in cytosolic and microsomal fractions of neutrophils were completely abolished by preincubation with N-ethylmaleimide at concentrations of less than 5 mM. We conclude that neutrophils possess a potent PA phosphohydrolase localized in their plasma membranes. Metabolism of cellular second-messengers by this enzyme may exert a profound effect on the functions of stimulated neutrophils.