Lysoplasmalogenase (EC 126.96.36.199 and EC 188.8.131.52) is an enzyme that catalyzes hydrolytic cleavage of the vinyl ether bond of lysoplasmalogen, forming fatty aldehyde and glycerophosphoethanolamine or glycerophosphocholine and is specific for the sn-2-deacylated form of plasmalogen. Here we report the purification, characterization, identification, and cloning of lysoplasmalogenase. Rat liver microsomal lysoplasmalogenase was solubilized with octyl glucoside and purified 500-fold to near homogeneity using four chromatography steps. The purified enzyme has apparent K m values of ∼50 μM for both lysoplasmenylcholine and lysoplasmenylethanolamine and apparent V m values of 24.5 and 17.5 μmol/min/mg protein for the two substrates, respectively. The pH optimum was 7.0. Lysoplasmalogenase was competitively inhibited by lysophosphatidic acid (K i ∼20 μM). The predominant band on a gel at ∼19 kDa was subjected to trypsinolysis, and the peptides were identified by mass spectrometry as Tmem86b, a protein of unknown function. Transient transfection of human embryonic kidney (HEK) 293T cells showed that TMEM86b cDNA yielded lysoplasmalogenase activity, and Western blot analyses confirmed the synthesis of TMEM86b protein. The protein was localized in the membrane fractions. The TMEM86b gene was also transformed into Escherichia coli, and its expression was verified by Western blot and activity analyses. Tmem86b is a hydrophobic transmembrane protein of the YhhN family. Northern blot analyses demonstrated that liver expressed the highest level of Tmem86b, which agreed with tissue distribution of activity. Overexpression of TMEM86b in HEK 293T cells resulted in decreased levels of plasmalogens, suggesting that the enzyme may be important in regulating plasmalogen levels in animal cells.