In murine P388D1 macrophages, the generation of prostaglandin E2 in response to long term stimulation by lipopolysaccharide involves the action of Group V secreted phospholipase A2 (PLA2), Group IV cytosolic PLA2 (cPLA2), and cyclooxygenase-2 (COX-2). There is an initial activation of cPLA2 that induces expression of Group V PLA2, which in turn induces both the expression of COX-2 and most of the arachidonic acid substrate for COX-2-dependent prostaglandin E2 generation. Because Group V PLA2 is a secreted enzyme, it has been assumed that after cellular stimulation, it must be released to the extracellular medium and re-associates with the outer membrane to release arachidonic acid from phospholipids. In the present study, confocal laser scanning microscopy experiments utilizing both immunofluorescence and green fluorescent protein-labeled Group V PLA2 shows that chronic exposure of the macrophages to lipopolysaccharide results in Group V PLA2 being associated with caveolin-2-containing granules close to the perinuclear region. Heparin, a cell-impermeable complex carbohydrate with high affinity for Group V PLA2, blocks that association, suggesting that the granules are formed by internalization of the Group V sPLA2 previously associated with the outer cellular surface. Localization of Group V PLA2 in perinuclear granules is not observed if the cells are treated with the Group IV PLA2 inhibitor methyl arachidonyl fluorophosphonate, confirming the important role for Group IV PLA2 in the activation process. Cellular staining with antibodies against COX-2 reveals the presence of COX-2-rich granules in close proximity to those containing Group V PLA2. Collectively, these results suggest that encapsulation of Group V PLA2 into granules brings the enzyme to the perinuclear envelope during cell activation where it may be closer to Group IV PLA2 and COX-2 for efficient prostaglandin synthesis.