Intact neutrophils possess a cellular mechanism that efficiently deactivates the microbicidal O2-generating NADPH oxidase during the respiratory burst (Akard, L. P., English, D., and Gabig, T. G. (1988) Blood 72, 322-327). The present studies directed at identifying the molecular mechanism(s) involved in NADPH oxidase deactivation showed that a heat- and trypsin-insensitive species in the cytosolic fraction from normal unstimulated neutrophils was capable of deactivating the membrane-associated NADPH oxidase isolated from opsonized zymosan- or phorbol 12-myristate 13-acetate-stimulated neutrophils. This cytosolic species also deactivated the cell-free-activated oxidase. Deactivation by this cytosolic species occurred in the absence of NADPH-dependent catalytic turnover and was reversible, since NADPH oxidase activity could be subsequently reactivated in the cell-free system. The sedimentable particulate fraction from unstimulated neutrophils did not demonstrate deactivator activity. Deactivator activity was demonstrated in the neutral lipid fraction of neutrophil cytosol extracted with chloroform:methanol. Following complete purification of cytosolic deactivator activity by thin layer chromatography and reversed phase high performance liquid chromatography, the deactivator species was shown to be a lipid thiobis ester compound by mass spectroscopy. Cellular metabolism of this compound in human neutrophils may reveal a unique mechanism for enzymatic control of the NADPH oxidase system and thereby play an important role in regulation of the inflammatory response.