Lipid phosphate phosphatase 1 (LPP-1) is presumed to regulate the balance between lipid phosphates and their dephosphorylated counterparts. The currently prevailing hypothesis based on in vitro studies proposes that LPP-1 should regulate phospholipid lipid growth factors and second messengers, including lysophosphatidic acid (LPA), sphingosine 1-phosphate (S1P), diacylglycerol (DAG), and phosphatidic acid (PA). To evaluate the role of LPP-1 in vivo, three transgenic lines were established. RT-PCR, Western blotting, and enzymatic activity measurement confirmed a copy number-dependent ubiquitous overexpression of LPP-1. PMA-stimulated PA production in immortalized LPP-1 fibroblasts led to an elevation in the accumulation of DAG without major changes in the phospholipid classes isolated from the liver. The LPP-1 phenotype showed reduced body size, birth weight, and abnormalities in fur growth, whereas histological abnormalities included significantly decreased number of hair follicles, disrupted hair structure, and a severely impaired spermatogenesis. Implantation of LPP-1 or wild-type embryos into pseudopregnant LPP-1 mothers yielded a reduced litter size. The plasma level of alanine-leucine aminotransferase was significantly elevated. Unexpectedly, plasma concentrations of the five major acyl-species of LPA were indistinguishable between wild-type and LPP-1 animals. In contrast with previous studies using plasmid-mediated overexpression in vitro, transgenic overexpression of LPP-1 did not affect ERK1/2 activation elicited by LPA, S1P, thrombin, epidermal growth factor (EGF), and platelet-derived growth factor (PDGF), which was presumed to be a major signaling event regulated by LPP-1. Thus, transgenic overexpression of LPP-1 in mice elicited a number of unexpected phenotypic alterations without affecting several aspects of LPA signaling, which point to previously unappreciated mechanisms and roles of lipid phosphates in select organs.