1. Chromaffin granule preparations isolated from bovine adrenal medulla hydrolyzed endogenous lysophosphatidylcholine (lyso-PC) and generated lysophosphatidylethanolamine when dialyzed at pH 7.5. 2. Undialyzed granule preparations hydrolyzed exogenously added [1-14C]palmitoyl-lyso-PC maximally (12-16 nmol/min per mg) at pH 7.5. At a given concentration of protein, activity increased with increasing concentrations of substrate lyso-PC to a maximum beyond which substrate inhibited activity up to 95%. 3. More than 95% of the lysophospholipase activity of fresh granule preparations toward exogenously added lyso-PC was inactivated irreversibly by dialysis. 4. By contrast, fresh microsomal preparations from adrenal medulla had similar substrate requirements for maximal lysophospholipase activity, but more than 35% of the activity was retained at high substrate concentrations or after extensive dialysis. 5. We conclude that adrenal organelles, other than microsomes, contain potent membrane-associated lysophospholipase activity that is inactivated preferentially by high detergent-substrate concentrations and/or dialysis. These observations suggest that lysophospholipase activity (and perhaps phospholipase A activity) is more widely distributed in organelle membranes of the adrenal medulla than was reported previously.