Control of molecular diffusion is pivotal for highly fluidic membranes to serve as substrates for biochemical reactions and the self-assembly of molecular machinery driving membrane protrusions. Lateral diffusion in membranes depends on lipid composition, which is highly diverse and homeostatically controlled in living cells. Due to the complexity of the underlying processes, its impact on molecular diffusion remain largely unclear. In this study, we show that lipid diffusion in model membranes is markedly decreased in cytosolic extracts. The reduction in lipid diffusivity could be pharmacologically inhibited by targeting phospholipase D (PLD), and addition of PLD to membranes mimicked the reduction in diffusion. Phosphatidic acid, a direct product of PLD, diffused slowly in model membranes and reduced the diffusivity of surrounding lipids. Furthermore, we demonstrated that PLD specifically controls the lateral diffusion of a myristoylated protein in cells, possibly due to auxiliary electrostatic interactions between cationic residues located near the lipidated tail and anionic phospholipids. PLD controlled the size and lifetime of localized patches of phosphatidylinositol (3,4,5) triphosphates that specify regions of membrane protrusions. Overall, the results of this study suggest that PLD controls the lateral diffusion of certain membrane proteins, which play key roles in phosphoinositide signaling.Significance StatementIn living cells, many biochemical reactions occur in confined regions on the membranes, facilitating the local occurrence of specific events, such as membrane protrusion. This is puzzling from a physical perspective because the membrane is a two-dimensional fluidic structure that should allow molecules to spread freely. Herein, we found that the fluidity of artificial membranes was markedly reduced by adding extracts from the cell cytoplasm. A lipid-modifying protein phospholipase D (PLD) was found to be responsible for this and it regulates the diffusion of membrane proteins in cells. This study suggests the novel role of PLD as a regulator of molecular diffusion and its impact on phosphoinositide production that serves as an important signal for cell deformation.