Lysophosphatidic acid (LPA) mediates pleomorphic effects on multiple cell lineages, including an increased proliferative response of ovarian cancer cells both in vitro and in vivo, at least in part through the novel expression of LPA receptors. Thus, LPA hydrolysis is necessary to limit the duration of LPA's action on multiple cell types, including ovarian cancer cells. We determined the principal mechanism of LPA hydrolysis by ovarian cancer cells and its regulation by GnRH, which is known to have antiproliferative actions on ovarian carcinomas. LPA-hydrolyzing activity in cell membranes of ovarian cancer specimens was assessed by measuring the conversion of exogenous [3H-oleoyl]LPA to [3H]oleic acid or mono[3H-oleoyl]glycerol. Approximately 98% of LPA hydrolysis could be accounted for by the dephosphorylation of LPA to yield monoglyceride, with the deacylation reaction accounting for less than 1% of LPA hydrolysis. The phosphatase activity in the plasma membrane ovarian cancer cells was approximately 2.5- and 8-fold higher than those in microsome and homogenate fractions, respectively. The membrane phosphatase was Mg2+ independent and insensitive to inhibition by N-ethylmaleimide, characteristics suggestive of phosphatidic acid phosphatase activity. Incubation of membranes from GnRH receptor-positive ovarian cancer specimens with the GnRH agonist, buserelin, induced a dose-dependent increase in LPA phosphatase activity, with a half-maximal effect occurring with 30 nmol/L buserelin. The stimulatory action of buserelin could be neutralized by displacement of GnRH from its receptor by the GnRH antagonist, antide. The plasma membranes from GnRH receptor-negative ovarian cancer specimens did not respond to GnRH stimulation. LPA phosphatase activity was also increased when the ovarian cancer cell line Caov-3 was exposed to GnRH agonist in intact cells before assay of cell membranes. These data demonstrate that LPA is hydrolyzed in the plasma membrane of ovarian cancer cells by the action of LPA phosphatase and provide initial evidence for functional coupling of LPA phosphatase to GnRH receptor occupancy.