In the central nervous system (CNS), prostaglandin (PG) and other bioactive lipids regulate vital aspects of neural membrane biology, including protein-lipid interactions, trans-membrane and trans-synaptic signaling. However, a series of highly reactive PGs, free fatty acids, lysophospolipids, eicosanoids, platelet-activating factor, and reactive oxygen species (ROS), all generated by enhanced phospholipase A2 (PLA2) activity and arachidonic acid (AA) release, participate in cellular injury, particularly in neurodegeneration. PLA2 activation and PG production are among the earliest initiating events in triggering brain-damage pathways, which can lead to long-term neurologic deficits. Altered membrane-associated PLA2 activities have been correlated with several forms of acute and chronic brain injury, including cerebral trauma, ischemic damage, induced seizures in the brain and epilepsy, schizophrenia, and in particular, Alzheimer's disease (AD). Biochemical mechanisms of PLA2 overactivation and its pathophysiological consequences on CNS structure and function have been extensively studied using animal models and brain cells in culture triggered with PLA2 inducers, PGs, cytokines, and related lipid mediators. Moreover, the expression of both COX-2 and PLA2 appears to be strongly activated during Alzheimer's disease (AD), indicating the importance of inflammatory gene pathways as a response to brain injury. This review addresses some current ideas concerning how brain PLA2 and brain PGs are early and key players in acute neural trauma and in brain-cell damage associated with chronic neurodegenerative diseases such as AD.