Previous studies have shown that membrane tubule-mediated export from endosomal compartments requires a cytoplasmic phospholipase A(2) (PLA(2)) activity. Here we report that the cytoplasmic PLA(2) enzyme complex platelet-activating factor acetylhydrolase (PAFAH) Ib, which consists of α1, α2, and LIS1 subunits, regulates the distribution and function of endosomes. The catalytic subunits α1 and α2 are located on early-sorting endosomes and the central endocytic recycling compartment (ERC) and their overexpression, but not overexpression of their catalytically inactive counterparts, induced endosome membrane tubules. In addition, overexpression α1 and α2 altered normal endocytic trafficking; transferrin was recycled back to the plasma membrane directly from peripheral early-sorting endosomes instead of making an intermediate stop in the ERC. Consistent with these results, small interfering RNA-mediated knockdown of α1 and α2 significantly inhibited the formation of endosome membrane tubules and delayed the recycling of transferrin. In addition, the results agree with previous reports that PAFAH Ib α1 and α2 expression levels affect the distribution of endosomes within the cell through interactions with the dynein regulator LIS1. These studies show that PAFAH Ib regulates endocytic membrane trafficking through novel mechanisms involving both PLA(2) activity and LIS1-dependent dynein function.