Activation of phospholipase D (PLD) has been investigated in dimethylsulfoxide differentiated HL-60 granulocytes labeled in endogenous 1-0-alkyl-2-acyl-sn-glycero-3-phosphocholine (alkyl-PC) by incubation with [3H]alkyl-lysoPC. Stimulation of these labeled cells with the chemotactic peptide, N-formyl-Met-Leu-Phe (fMLP), induces rapid generation of [3H]phosphatidic acid (PA) and slower formation of [3H]diglyceride, suggesting hydrolysis of alkyl-PC by PLD. A unique feature of PLD is its ability to transfer the phosphatidyl moiety of phospholipids to alcohols (transphosphatidylation). This characteristic has been exploited to identify PLD activity. For example, when ethanol is present during stimulation of the HL-60 cells, [3H]phosphatidylethanol (PEt) is formed with a concomitant decrease in [3H]PA. Cells incubated with [32P]orthophosphate to label the terminal phosphate of ATP do not incorporate 32P into PEt, consistent with the [3H]PEt not being synthesized from [3H]diglyceride. In contrast, [3H]PA arises from both PLD and diglyceride kinase activities. Furthermore, PEt synthesis closely parallels PA formation and both are inhibited by an fMLP receptor antagonist, suggesting that both PA and PEt are derived from agonist-stimulated PLD action. These observations are consistent with phospholipase D-catalyzed breakdown of alkyl-PC in fMLP- stimulated granulocytes.