Platelet-activating factor (PAF) is a potent pro-inflammatory autacoid with diverse physiological and pathological actions. These actions are modulated by PAF acetylhydrolase, which hydrolyzes the sn-2 ester bond to yield the biologically inactive lyso-PAF. In contrast to most secreted phospholipase A2s, plasma PAF acetylhydrolase is calcium-dependent and contains a GXSXG motif that is characteristic of the neutral lipases and serine esterases. In this study we tested whether the serine in this motif is part of the active site of plasma PAF acetylhydrolase and, if so, what the other components of the active site are. Using site-directed mutagenesis, we demonstrated that Ser-273 (of the GXSXG motif), Asp-296, and His-351 are essential for catalysis. These residues were conserved in PAF acetylhydrolase sequences isolated from bovine, dog, mouse, and chicken. The linear orientation and spacing of these catalytic residues are consistent with the alpha/beta hydrolase conformation of other lipases and esterases. In support of this model, analysis of systematic truncations of PAF acetylhydrolase revealed that deletions beyond 54 amino acids from the NH2 terminus and 21 from the COOH terminus resulted in a loss of enzyme activity. These observations demonstrate that although plasma PAF acetylhydrolase is a phospholipase A2 it has structural properties characteristic of the neutral lipases and esterases.