T he human hepatoma cell line, HepG2, secreted an activity that degrades platelet-activating factor (PAF) by the hydrolysis of the sn-2 acetyl group. This activity was Ca++ independent, inhibited by diisopropylfluorophosphate but not by p-bromophenacyl bromide, and resistant to treatment with trypsin or pronase. Separation of HepG2-conditioned medium by gel filtration disclosed that the activity was associated with lipoproteins. An antiserum against PAF acetylhydrolase immunoprecipitated this activity. It was not recognized by an antibody against lecithin:cholesterol acyltransferase (LCAT), which also is secreted by HepG2 cells. Therefore the phospholipase A2 activity of LCAT was excluded as a source of the observed activity. PAF added to the culture medium stimulated the secretion of the PAF-degrading activity by HepG2 cells, while lyso-PAF was inactive. Maximal stimulation was observed with 5 ng/ml PAF, which induced a fivefold increase. The presence of 5 ng/ml PAF, enhanced the secretion of [35S]methionine-labeled PAF acetylhydrolase and cycloheximide inhibited both the basal and PAF-stimulated secretion of the labeled enzyme. We conclude that HepG2 cells produce PAF acetylhydrolase. The liver may be a major source of plasma PAF acetylhydrolase, and PAF may induce the production of its inactivating enzyme by the liver.