It is now well established that epidermis, like many other tissues, contains a phospholipase A2 that is responsible for the initiation of the arachidonic acid cascade. Here we report that human epidermis also contains a second, quite distinct enzyme of the phospholipase A2 group, which is unique in its extreme activity against phospholipids in true solution. It also differs from the classic cutaneous enzyme in that (a) its activity is not reduced by pretreatment of the skin with corticosteroids in vivo nor by treatment of the epidermal homogenate with alkaline phosphatase in vitro, and (b) its activity is reduced, rather than increased, in the lesions of inflammatory diseases such as psoriasis. The enzyme seems to occur mainly in fully differentiated keratinocytes, its level being low in the basal cell layer of epidermis and in keratinocytes cultured in vitro. On the basis of these observations, we suggest that this new phospholipase A2 is responsible for the degradation of phospholipids that accompanies the terminal keratinization process.