Platelet-activating factor (PAF) is a potent, bioactive phospholipid that acts on multiple cells and tissues through its G protein-coupled receptor (GPCR). PAF is not stored but is rapidly generated via enzymatic acetylation of the precursor 1-O-hexadecyl-2-hydroxy-sn-glycero-3-phosphocholine (lysoPAF). The bioactivity of PAF is effectively and tightly regulated by PAF acetylhydrolases, which convert PAF back to lysoPAF. Previous studies report that lysoPAF is an inactive precursor and metabolite of PAF. However, lysoPAF has not been carefully studied in its own context. Here we report that lysoPAF has an opposing effect of PAF in the activation of neutrophils and platelets. Whereas PAF potentiates neutrophil NADPH oxidase activation, lysoPAF dose-dependently inhibits this function. Inhibition by lysoPAF is not affected by the use of a PAF receptor antagonist or genetic deletion of the PAF receptor gene. The mechanism of lysoPAF-mediated inhibition of neutrophils involves an elevation in the intracellular cAMP level, and pharmacological blockade of adenylyl cyclase completely reverses the inhibitory effect of lysoPAF. In addition, lysoPAF increases intracellular cAMP levels in platelets and inhibits thrombin-induced platelet aggregation, which can be reversed by inhibition of protein kinase A. These findings identify lysoPAF as a bioactive lipid with opposing functions of PAF and suggest a novel and intrinsic regulatory mechanism for balance of the potent activity of PAF.