Abstract The product of the LPP1 gene in Saccharomyces cerevisiae is a membrane-associated enzyme that catalyzes the Mg 2+-independent dephosphorylation of phosphatidate (PA), diacylglycerol pyrophosphate (DGPP), and lysophosphatidate (LPA). The LPP1-encoded lipid phosphatase was overexpressed 681-fold in Sf-9 insect cells and used to examine the enzymological properties of the enzyme using PA, DGPP, and LPA as substrates. The optimum pH values for PA phosphatase, DGPP phosphatase, and LPA phosphatase activities were 7.5, 7.0, and 7.0, respectively. Divalent cations (Mn 2+, Co 2+, and Ca 2+), NaF, heavy metals, propranolol, phenylglyoxal, and N-ethylmaleimide inhibited the PA phosphatase, DGPP phosphatase, and LPA phosphatase activities of the enzyme. The inhibitory effects of N-ethylmaleimide and phenylglyoxal on the LPP1-encoded enzyme were novel properties when compared with other Mg 2+-independent lipid phosphate phosphatases from S. cerevisiae and mammalian cells. The LPP1-encoded enzyme exhibited saturation kinetics with respect to the surface concentrations of PA ( K m=0.05 mol%), DGPP ( K m=0.07 mol%), and LPA ( K m=0.08 mol%). Based on specificity constants ( V max/ K m), the order of substrate preference was PA (4.2 units/mg/mol%)>DGPP (3.5 units/mg/mol%)>LPA (1.3 units/mg/mol%). DGPP ( K i=0.12 mol%) was a competitive inhibitor with respect to PA, and PA ( K i=0.12 mol%) was a competitive inhibitor with respect to DGPP. This suggested that the binding sites for these substrates were the same. The enzymological properties of the LPP1-encoded enzyme differed significantly from those of the S. cerevisiae DPP1-encoded lipid phosphatase, a related enzyme that also utilizes PA, DGPP, and LPA as substrates.