We examined the effects of Interleukin 1 (IL 1) on rabbit articular chondrocytes with particular emphasis on arachidonic acid metabolism in these cells. Articular chondrocytes were isolated from the knee joints of normal New Zealand white rabbits and were cultured in vitro until confluent. Addition of 5 U/ml of purified IL 1 to chondrocytes led to an early increase in cell-associated phospholipase A2 (PLA2; measured by hydrolysis of [14C]arachidonic acid-labeled E. coli). Within 1 hr after IL 1 addition, cell-associated PLA2 activity was increased by more than threefold relative to basal PLA2 activity, and further increases in cellular enzyme activity were observed up to 48 hr of IL 1 treatment. IL 1 stimulation also led to a time- and dose-related release of extracellular PLA2 and PGE2, but IL 1-induced PLA2 and PGE2 secretion occurred after the initial burst of intracellular PLA2 activity. Similar PLA2 and PGE2 responses were also observed when purified human IL 1 or IL 1-containing conditioned medium from LPS-stimulated human monocytes were used, but recombinant IL 2 or IL 3 were inactive. IL 1-induced chondrocyte PLA2 did not release radiolabeled free fatty acid from phosphatidylethanolamine labeled at the C-1 position with [14C]stearic acid, confirming the identity of this enzyme as PLA2. These data, therefore, provide the first direct evidence that IL 1 activates cellular PLA2, and we propose that PLA2 activation may be an early signal that initiates the inflammatory actions of IL 1.