The hydrolysis of phosphatidylcholine by phospholipase D (PLD) results in the production of phosphatidic acid and choline. An assay that uses an exogenous substrate was developed to measure this activity in membranes and solubilized preparations from HL60 cells. A cytosolic factor markedly enhanced PLD activity in membranes and was essential for GTP gamma S-dependent stimulation of an enriched preparation of PLD. The factor was purified to homogeneity from bovine brain cytosol and identified as a member of the ADP-Ribosylation Factor (ARF) subfamily of small G proteins. Subsequently, recombinant myristoylated ARF1 was found to be a better activator of PLD activity than was the nonmyristoylated form. ARF proteins have been implicated recently as factors for regulation of intracellular vesicle traffic. The current finding suggests that PLD activity plays a prominent role in the action of ARF and that ARF may be a key component in the generation of second messengers via phospholipase D.