Phosphatidic acid and its derivatives play potentially important roles as extracellular messengers in biological systems. An ecto-phosphatidic acid phosphohydrolase (ecto-PAPase) has been identified which effectively regulates neutrophil responses to exogenous phosphatidic acid by converting the substrate to diacylglycerol. The present study was undertaken to characterize this ecto-enzyme on intact cells and to isolate the enzyme from solubilized neutrophil extracts. In the absence of detergent, short chain phosphatidic acids were hydrolysed most effectively by neutrophil plasma membrane ecto-PAPase; both saturated and unsaturated long chain phosphatidic acids were relatively resistant to hydrolysis. Both long (C18:1) and short (C8) chain lyso-phosphatidic acids were hydrolysed at rates comparable with those observed for short chain (diC8) phosphatidic acid. Activity of the ecto-enzyme accounted for essentially all of the N-ethylmaleimide-insensitive, Mg2+-independent PAPase activity recovered from disrupted neutrophils. At 37 degrees C and pH7.2, the apparent Km for dioctanoyl phosphatidic acid (diC8PA) was 1. 4x10(-3) M. Other phosphatidic acids and lysophosphatidic acids inhibited hydrolysis of [32P]diC8PA in a rank order that correlated with competitor solubility, lysophosphatidic acids and unsaturated phosphatidic acids being much more effective inhibitors than long chain saturated phosphatidic acids. Dioleoyl (C18:1) phosphatidic acid was an unexpectedly strong inhibitor of activity, in comparison with its ability to act as a direct substrate in the absence of detergent. Other inhibitors of neutrophil ecto-PAPase included sphingosine, dimethyl- and dihydro-sphingosine, propranolol, NaF and MgCl2. Of several leucocyte populations isolated from human blood by FACS, including T cells, B cells, NK lymphocytes and monocytes, ecto-PAPase was most prevalent on neutrophils; erythrocytes were essentially devoid of activity. A non-hydrolysable, phosphonate analogue of phosphatidic acid, phosphonate 1, efficiently solubilized catalytic activity from intact neutrophils without causing cell disruption or increasing permeability. Enzyme activity in solubilized extracts was purified in the absence of detergent by successive heparin-Sepharose, gel filtration and anion exchange chromatography. By assaying activity in renatured SDS/polyacrylamide gel slices, the molecular mass of neutrophil ecto-PAPase was estimated to be between 45 and 52 kDa, similar to the molecular mass of previously purified plasma membrane PAPases. Since a large portion of neutrophil plasma membrane PAPase is available for hydrolysis of exogenous substrates, ecto-PAPase may play an important role in regulating inflammatory cell responses to extracellular phosphatidic acid in biological systems.