Transglutaminases (TG), which include coagulation Factor XIIIa, are calcium-dependent ubiquitous enzymes. TGs catalyze the formation of an isopeptide bond by cross-linking a specific glutamine and a lysine residue between two proteins or within the same protein molecule. Phospholipase A2 (PLA2) is a key enzyme in the regulation of prostaglandin and leukotriene biosynthetic pathways, which catalyzes the release of free fatty acids from the sn-2 position of membrane glycerophospholipids. This enzyme has been suggested to be pathophysiologically related to the initiation and propagation of several inflammatory diseases including juvenile rheumatoid and rheumatoid arthritis. Here, we describe a novel TG-catalyzed post-translational modification of PLA2 which dramatically increases the activity of this enzyme. This increase was dependent upon the time of preincubation, the concentration of TG and the presence of Ca2+. Size exclusion chromatography of TG-treated PLA2 yielded two peaks of PLA2 activity, with apparent molecular masses of 26 and 13 kDa, respectively. The 26-kDa species, a putative PLA2 dimer, contained epsilon-(gamma-glutamyl)-lysine isopeptide in about 1:1 molar ratio to PLA2, suggesting an intramolecular rather than intermolecular cross-linking. This hypothesis was confirmed by sodium dodecyl sulfate-polyacrylamide gel electrophoresis of the 26- and 13-kDa species under denaturing conditions. The specific activity of the dimeric peak was 10-fold higher with respect to that of the monomeric enzyme. These data suggest that TG-catalyzed covalent cross-linking of PLA2 is intramolecular and that this may promote a noncovalent dimerization and subsequent activation of this enzyme via a conformational change. To our knowledge, this is the first demonstration that TG-mediated post-translational modification of an enzyme (e.g. PLA2) causes a striking increase in the catalytic activity of the enzyme.