A recent study demonstrated that phospholipase B (PLB), lysophospholipase (LPL) and lysophopholipase transacylase (LPTA) are secreted by Cryptococcus neoformans var. neoformans and showed that the amount of enzyme production correlated with virulence in mice. The present study characterised the extracellular enzyme activities further by radiometric assays and 31 P nuclear magnetic resonance spectroscopy (NMR). All three enzymes were most active between 25 and 40OC. Bovine lung surfactant and its major lipid components, disaturated phosphatidylcholine and phosphatidylglycerol, were the optimal substrates for PLB. Lysophosphatidylcholine was the favoured substrate for LPL and LPTA. PLB and LPL/LPTA were differentially affected by Triton X-100, and palmitoyl carnitine was a potent inhibitor of the three phospholipases. LPL and PLB activities were inhibited by dithiothreitol; N-ethylmaleimide inhibited LPL and LPTA activities. None of the enzymes was inhibited by N-bromosuccinimide or p-bromophenacyl bromide. Cellular disruption experiments indicated that > 85% of the phospholipase activities were cell-associated, with LPL and LPTA being more easily released than PLB. At pH 5.5 and 7.0, the heat-inactivated secreted enzyme preparations decreased the viability of human neutrophils. This effect was attenuated by active supernates. The relative activities of the PLB, LPL and LPTA in the environment of neutrophils are likely to determine the fate of these cells in vivo. Both phospholipases and heat-stable substances secreted by C. neoformans at 37°C could contribute to membrane degradation and virulence.