The phospholipase A2s (PLA2s) are a diverse group of enzymes that hydrolyze the sn-2 fatty acid from phospholipids and play a role in a wide range of physiological functions. A 61-kDa calcium-independent PLA2, termed cPLA2gamma, was identified as an ortholog of cPLA2alpha with approximately 30% overall sequence identity. cPLA2gamma contains a potential prenylation motif at its C terminus, and is known to have PLA2 and lysophospholipase activities, but its physiological roles have not been clarified. In the present study, we expressed various forms of recombinant cPLA2gamma, including non-prenylated and non-cleaved forms, in order to investigate the effects of C-terminal processing. We examined the expression of the wild type and non-prenylated (SCLA) forms of cPLA2gamma, and found that the SCLA form was expressed normally and retained almost full activity. Expression of the prenylated and non-cleaved form of cPLA2gamma using yeast mutants lacking prenyl protein proteases AFC1 (a-factor-converting enzyme) and RCE1 (Ras-converting enzyme) revealed decreased expression in the mutant strain compared to that in the wild type yeast, suggesting that complete C-terminal processing is important for the functional expression of cPLA2gamma. In addition, cPLA2gamma was found to have coenzyme A (CoA)-independent transacylation and lysophospholipid (LPL) dismutase (LPLase/transacylase) activities, suggesting that it may be involved in fatty acid remodeling of phospholipids and the clearance of toxic lysophospholipids in cells.