The recent demonstration that myocardial Ca(2+)-independent phospholipase A2 exists as a complex of catalytic and regulatory polypeptides that is modulated by ATP has suggested a novel mechanisms through which alterations in glycolytic flux can be coupled to the generation of eicosanoids which facilitate insulin secretion. To determine the potential relevance of this mechanism, we examined the kinetic characteristics, substrate specificities, and cellular locus of phospholipase A2 activity in pancreatic islets. Rat pancreatic islets contain a Ca(2+)-independent phospholipase A2 activity which is optimal at physiologic pH, preferentially hydrolyzes phospholipid substrates containing a vinyl ether linkage at the sn-1 position, and prefers arachidonic acid compared to oleic acid in the sn-2 position. Rat islet Ca(2+)-independent phospholipase A2 activity is inhibited by the mechanism-based inhibitor (E)-6-(bromomethylene)-3-(1-naphthalenyl)-2H-tetrahydropyran-2-one and is stimulated by ATP. Purification of beta-cells from dispersed pancreatic islet cells by fluorescence-activated cell sorting demonstrated that beta-cells (but not non-beta-cells) contain Ca(2+)-independent, ATP-stimulated phospholipase A2 activity. Remarkably, clonal RIN-m5f insulinoma cells, which possess a defect in glucose-induced insulin secretion, contain a Ca(2+)-independent phospholipase A2 which is not modulated by alterations in ATP concentration. Collectively, these results and those of an accompanying paper [Ramanadham et al. (1993) Biochemistry (following paper in this issue)] implicate Ca(2+)-independent phospholipase A2 as a putative glucose sensor which can couple alterations in glycolytic metabolism to the generation of biologically active eicosanoids and thereby facilitate glucose-induced insulin secretion.