Phospholipase A(2) (PLA(2))-activating protein (PLAA) is a novel signaling molecule that regulates the production of prostaglandins (PGE(2)) and tumor necrosis factor (TNF)-alpha. To characterize the function of native PLAA in situ, we generated HeLa (Tet-off) cells overexpressing plaa (plaa(high)) and control (plaa(low)) cells, with the plaa gene in opposite orientation in the latter construct. The plaa(high) cells produced significantly more PGE(2) and interleukin (IL)-6 compared to plaa(low) cells in response to TNF-alpha. There was an increased activation and/or expression of cytosolic PLA(2), cyclooxgenase-2, and NF-kappaB after induction of plaa(high) cells with TNF-alpha compared to the respective plaa(low) cells. Microarray analysis of plaa(high) cells followed by functional assays revealed increased production of proinflammatory cytokine IL-32 and a decrease in the production of annexin A4 and clusterin compared to plaa(low) cells. We demonstrated the role of annexin A4 as an inhibitor of PLA(2) and showed that addition of exogeneous clusterin limited the production of PGE(2) from plaa(high) cells. To understand regulation of plaa gene expression, we used a luciferase reporter system in HeLa cells and identified one stimulatory element, with Sp1 binding sites, and one inhibitory element, in exon 1 of the plaa gene. By using decoy DNA oligonucleotides to Sp1 and competitive binding assays, we showed that Sp1 maintains basal expression of the plaa gene and binds to the above-mentioned stimulatory element. We demonstrated for the first time that the induction of native PLAA by TNF-alpha can perpetuate inflammation by enhancing activation of PLA(2) and NF-kappaB.