Lysosomal phospholipase A2 (PLA2G15) is a ubiquitous enzyme uniquely characterized by a subcellular localization to the lysosome and late endosome. PLA2G15 has an acidic pH optimum, is calcium independent, and acts as a transacylase in the presence of N-acetyl-sphingosine as an acceptor. Recent studies aided by the delineation of the crystal structure of PLA2G15 have clarified further the catalytic mechanism, sn-1 versus sn-2 specificity, and the basis whereby cationic amphiphilic drugs inhibit its activity. PLA2G15 has recently been shown to hydrolyze short chain oxidized phospholipids which access the catalytic site directly based on their aqueous solubility. Studies on the PLA2G15 null mouse suggest a role for the enzyme in the catabolism of pulmonary surfactant. PLA2G15 may also have a role in host defense and in the processing of lipid antigens for presentation by CD1 proteins. This article is part of a Special Issue entitled Novel functions of phospholipase A2 Guest Editors: Makoto Murakami and Gerard Lambeau.