A specific protein inhibitor of partially purified bovine brain phospholipase D (PLD) was identified from bovine brain cytosol. The PLD inhibitor has been enriched through several chromatographic steps and characterized with respect to size and mechanism of inhibition. The inhibitor showed an apparent molecular mass of 30 kDa by Superose 12 gel exclusion chromatography and inhibited PLD activity with an IC50 of 7 nM. The inhibitor had neither proteolytic activity nor phospholipid-hydrolyzing activity. Because phosphatidylinositol 4,5-bisphosphate (PIP2), which is included in substrate vesicles, is an essential cofactor for PLD, we examined whether the inhibition might be mediated by sequestration of PIP2. PIP2 hydrolysis by phospholipase C (PLC)-beta1 was not affected by the inhibitor and the inhibitor did not bind to substrate vesicles containing PIP2. In contrast, a PH domain derived from PLC-delta1, which could bind to PIP2, showed a nearly identical inhibition of both PLC-beta1 and PLD activities. Thus, the PLD inhibition by the inhibitor is due to the specific interaction with not PIP2 but PLD. The suppression of PLD activity by the inhibitor was largely eliminated by the addition of ADP-ribosylation factor (ARF) and GTPgammaS. We propose that the inhibitor plays a negative role in regulation of PLD activity by PIP2 and ARF.