Previous work has suggested that the glycosylphosphatidylinositol-specific phospholipase D (GPI-PLD) purified from bovine serum is inhibited by phosphatidic acid (PA). In this study we report on the specificity and mechanism of this phenomenon using [3H]myristate-labeled variant surface glycoprotein dispersed in Nonidet P-40 as substrate. Inhibition of GPI-PLD by PAs (IC50 approximately 1 microM) was relatively independent of the length or degree of unsaturation of the fatty acyl chains. It was also observed that lysophosphatidic acid and several natural and synthetic lipid A preparations were inhibitory in the same concentration range. The inhibitory potency of PA, lysophosphatidic acid, and lipid A was dependent on the detergent concentration in the assay but in all cases this was in a large (i.e. > 100-fold) molar excess over the inhibitor. The inhibitory lipids did not affect substrate availability nor did they reduce hydrolysis of variant surface glycoprotein by a bacterial phosphatidylinositol-specific phospholipase C. Studies with a wide range of other lipids, detergents, and phosphate esters indicated that inhibition was specific for lipids containing a phosphomonoester group. The data suggest that inhibition is due to a direct interaction between PA (or lipid A) and the GPI-PLD rather than an indirect effect on the substrate particle.