Lysophospholipase L2, which is bound to the inner membrane of Escherichia coli K-12, was produced in a large amount in cells bearing its cloned structural gene. Starting from these cells, the lysophospholipase L2 was purified approximately 700-fold to near homogeneity by solubilization with KCl, ammonium sulfate fractionation, chromatofocusing in the presence of a zwitterionic detergent, CHAPS (3-[(3-cholamidopropyl)dimethylammonio]-1-propanesulfonate), and heparin-Sepharose affinity column chromatography. The final preparation showed a single protein band with a molecular weight of 38,500 daltons in SDS-polyacrylamide gel electrophoresis. The amino acid sequence of the NH2-terminal portion of the purified enzyme was determined. It was in complete agreement with that deduced from the nucleotide sequence of the structural gene, pldB [Kobayashi, T., Kudo, I., Karasawa, K., Mizushima, H., Inoue, K., & Nojima, S. (1985) J. Biochem. 98, 1017-1025.] The purified enzyme hydrolyzes 2-acyl glycerophosphoethanolamine (GPE) and 2-acyl glycerophosphocholine (GPC) more effectively than 1-acyl GPE and 1-acyl GPC, but does not attack diacylphospholipids. The enzyme also catalyzes the transfer of an acyl group from lysophospholipid to phosphatidylglycerol for formation of acyl phosphatidylglycerol. The acyl group was more effectively transferred from 2-acyl lysophospholipid than from the 1-acyl derivative. This enzyme was heat-labile and was inactivated at 55 degrees C within 5 min. The present paper shows clearly that lysophospholipase L2 is a different enzyme protein from lysophospholipase L1 which was formerly purified from the supernatant of the wild strain of E. coli K-12 homogenates [Doi, O. & Nojima, S. (1975) J. Biol. Chem. 250, 5208-5214].