A Mg
2؉-independent phosphatidate phosphohydrolase was purified from rat liver plasma membranes in two distinct forms, an anionic protein and a cationic protein. Both forms of the enzyme dephosphorylated phosphatidate, ceramide 1-phosphate, lysophosphatidate, and sphingosine 1-phosphate. When assayed at a constant molar ratio of lipid to Triton X-100 of 1:500, the apparent K m values of the anionic phosphohydrolase for the lipid substrates was 3.5, 1.9, 0.4, and 4.0 M, respectively. The relative catalytic efficiency of the enzyme for phosphatidate, ceramide 1-phosphate, lysophosphatidate, and sphingosine 1-phosphate was 0.16, 0.14, 0.48, and 0.04 liter (min⅐mg) ؊1 , respectively. The hydrolysis of phosphatidate was inhibited competitively by ceramide 1-phosphate, lysophosphatidate, and sphingosine 1-phosphate. The K i(app) values were 5.5, 5.9, and 4.0 M, respectively. The hydrolysis of phosphatidate by the phosphohydrolase conformed to a surface dilution kinetic model. It is concluded that the enzyme is a lipid phosphomonoesterase that could modify the balance of phosphatidate, ceramide 1-phosphate, lysophosphatidate, and sphingosine 1-phosphate relative to diacylglycerol, ceramide, monoacylglycerol, and sphingosine, respectively. The enzyme could thus play an important role in regulating cell activation and signal transduction.