A phospholipase A₂ was identified from MDCK cell homogenates with broad specificity toward glycerophospholipids including phosphatidylcholine, phosphatidylethanolamine, phosphatidylserine, and phosphatidylglycerol. The phospholipase has the unique ability to transacylate short chain ceramides. This phospholipase is calcium-independent, localized to lysosomes, and has an acidic pH optimum. The enzyme was purified from bovine brain and found to be a water-soluble glycoprotein consisting of a single peptide chain with a molecular weight of 45 kDa. The primary structure deduced from the DNA sequences is highly conserved between chordates. The enzyme was named lysosomal phospholipase A₂ (LPLA₂) and subsequently designated group XV phospholipase A₂. LPLA₂ has 49% of amino acid sequence identity to lecithin-cholesterol acyltransferase and is a member of the αβ-hydrolase superfamily. LPLA₂ is highly expressed in alveolar macrophages. A marked accumulation of glycerophospholipids and extensive lamellar inclusion bodies, a hallmark of cellular phospholipidosis, is observed in alveolar macrophages in LPLA₂(-/-) mice. This defect can also be reproduced in macrophages that are exposed to cationic amphiphilic drugs such as amiodarone. In addition, older LPLA₂(-/-) mice develop a phenotype similar to human autoimmune disease. These observations indicate that LPLA₂ may play a primary role in phospholipid homeostasis, drug toxicity, and host defense.