The kinetics of the Ca2+-dependent, alkaline pH optimum, membrane-bound phospholipase A2 from the P388D1 macrophage-like cell line were studied using various phosphatidylcholine (PC) and phosphatidylethanolamine (PE) substrates. This enzyme exhibits "surface dilution kinetics" toward PC in Triton X-100 mixed micelles, and the "dual phospholipid model" was found to adequately describe its kinetic behavior. With substrate in the form of sonicated vesicles, the dual phospholipid model should give rise to Michaelis-Menten type kinetics. However, the hydrolysis of dipalmitoyl-PC, 1-palmitoyl-2-oleoyl-PC, and 1-stearoyl-2-arachidonoyl-PC vesicles exhibited two distinct activities. Below 10 microM, the data appeared to follow Michaelis-Menten behavior, while at higher concentrations, the data could best be fit to a Hill equation with a Hill coefficient of 2. These PCs had Vmax values for the low substrate concentration range of 0.2-0.6 nmol min-1 mg-1 and Km values of 1-2 microM. At the high substrate concentration range, the Vmax values were between 5 and 7 nmol min-1 mg-1. PC containing unsaturated fatty acids had an apparent Km, determined from the Hill equation, of about 15 microM, while the apparent Km of dipalmitoyl-PC was 0.6 microM. When 70% glycerol was included in the assays, a single Michaelis-Menten curve was obtained for both dipalmitoyl-PC and 1-stearoyl,2-arachidonoyl-PC. Possible explanations for these kinetic results include reconstitution of the membrane-bound phospholipase A2 in the phospholipid vesicle or the enzyme has tow distinct phospholipid binding function. The kinetics for both dipalmitoyl-PC and dipalmitoyl-PE hydrolysis in vesicles was very similar, indicating that the enzyme does not greatly prefer one of these head groups over the other. The enzyme also showed no preference for arachidonoyl containing phospholipid. Enzymatic activity toward PC containing saturated fatty acids was linear to about 15% hydrolysis while the hydrolysis of PC containing unsaturated fatty acids was linear to only about 5%. This loss of linearity was due to inhibition by released unsaturated fatty acids. Arachidonic acid was found to be a competitive inhibitor of dipalmitoyl PC hydrolysis with a K1 of 5 microM. This tight binding suggests a possible in vivo regulatory role for arachidonic acid. Three compounds of the arachidonic acid cascade, prostaglandin F2 alpha, 6-keto-prostaglandin F1 alpha, and thromboxane B2, showed no inhibition of enzymatic activity.