We have shown that lysophosphatidylcholine (lyso-PC) increases endothelial nitric-oxide synthase (eNOS) expression at the transcriptional level (Zembowicz, A., Tang, J.-L., and Wu, K. K. (1995) J. Biol. Chem. 270, 17006-17010). To elucidate the mechanism by which lyso-PC increases the eNOS transcription, we identified Sp1 sites at -104 to -90 and PEA3 sites at -40 to -24 as being involved in lyso-PC-induced promoter activity. Site-directed mutagenesis of Sp1 sites resulted in a marked reduction of basal and lyso-PC-induced activity whereas PEA3 site mutation abrogated response to lyso-PC. Band shift assays revealed that lyso-PC augmented Sp1 binding activity. Pretreatment of cells or nuclear extracts with okadaic acid reduced the Sp1 binding activity. Furthermore, okadaic acid treatment abrogated the lyso-PC induced promoter augmentation. Lyse-PC increased the nuclear extract protein phosphatase 2A (PP2A) activity, which was suppressed by okadaic acid treatment. These results suggest that lyso-PC up-regulates eNOS transcription by a PP2A-dependent increase in Sp1 binding activity.