Phospholipase A2 activity in islet cell homogenates and dispersed islet cells of the rat was determined using an exogenous radiolabeled phospholipid substrate from E. coli membranes. Phospholipase A2 activity in islet homogenates was found to have two pH optima in acid or neutral/alkaline pH ranges. The enzyme activity at pH 7.5 was calcium dependent and responded to increasing calcium concentrations with graded increases in phospholipid hydrolysis. Preincubation of islets with a concentration of glucose known to elicit maximum rates of insulin secretion resulted in a stable activation of phospholipase A2 activity which was assayable in islet homogenates. Glucose stimulated phospholipase A2 in these preparations by as much as 220% above control. 2-Deoxy-D-glucose, a nonsecretory analogue of glucose, did not elicit a significant increase in islet phospholipase A2 activity. The glucose sensitive enzyme was associated with a membrane-enriched subcellular fraction in which the glucose-stimulated activity was greater than 2-fold higher than control activity. Glucose stimulation potentiated the phospholipase A2 activity measured in the presence of high calcium concentrations. Phospholipase A2 activity was also found in dispersed islet cell preparations where glucose stimulation of what may be a partly externalized membrane enzyme was most apparent at low calcium concentrations. These data indicate that islet cells possess phospholipase A2 activity which may be in part localized to the plasma membrane as well as other membrane systems, and which exhibits the characteristic properties of pH and calcium dependency, and sensitivity to secretagogue stimulation reported for the enzyme in other secretory systems.