Lysophosphatidic acid (LPA) is present at elevated concentrations in the ascites and plasma of ovarian cancer patients. Ovarian cancer cells produce and release LPA both constitutively and after stimulation. LPA can induce proliferation, survival, invasiveness, and resistance to chemotherapy of ovarian cancer cells. This suggests that LPA may be critically important for the development or progression of ovarian cancer and is thus a potential target for therapy. In this study, we demonstrate that introduction of the integral membrane protein, human lipid phosphate phosphohydrolase-3 (hLPP-3) enzyme, which hydrolyzes phosphatidic acid, LPA, sphingosine, and ceramide phosphate in vitro with selectivity for LPA, into SKOV3 and OVCAR-3 ovarian cancer cells decreases colony-forming activity, increases apoptosis, and decreases tumor growth in vitro and in vivo. Strikingly, coculture of hLPP-3-expressing cells with nontransfected parental cells decreased the colony-forming activity of the parental cells, compatible with hLPP-3 decreasing levels of an extracellular mediator, likely LPA. Compatible with this contention, the expression of hLPP-3 was associated with increased rates of extracellular LPA hydrolysis. The effects of hLPP-3 on colony-forming activity were substantially reversed by the LPP-resistant LPA analogue, O-methylphosphothionate. The ability of O-methylphosphothionate to ameliorate the effects of hLPP-3, combined with the inability of an enzymatically inactive hLPP-3 to alter cellular function, suggests that the major effect of hLPP-3 was to increase the hydrolysis of extracellular LPA. Thus genetic or pharmacological manipulation of LPA metabolism, receptor activation, or downstream signaling is an attractive approach for therapy of ovarian cancer.