A membrane-bound phospholipase C-like hydrolase present in lysates of bloodstream forms of Trypanosoma brucei rapidly converts the membrane form of the variant surface protein to the soluble form and 1,2-dimyristoylglycerol [(1985) M.A.J. Ferguson et al. J. Biol. Chem., 260, 4963-4968]. The hydrolase is inhibited by p-chloromercuribenzenesulfonate. The synthesis of the enzyme is rapidly repressed upon differentiation of bloodstream forms to procyclic cells and the enzyme activity declines to an undetectable level during subsequent growth of procyclic forms.