Tumor necrosis factor (TNF) is an inflammatory cytokine that inhibits the replication of many viruses in cultured cells. We have reported that adenovirus (Ad) infection of TNF-resistant mouse cells renders them susceptible to lysis by TNF and that two sets of proteins encoded by the E3 transcription unit block TNF cytolysis, The E3 protein sets are named E3-14.7K (14,700 kDa) and E3-10.4K/14.5K (a complex of two proteins of 10,400 and 14,500 kDa). TNF activation of the 85-kDa cytosolic phospholipase A(2) (cPLA(2)) is thought to be essential for TNF cytolysis (i.e., TNF-induced apoptosis). Here we provide evidence that cPLA, is important in the response of Ad-infected cells to TNF and that the mechanism by which E3-14.7K and E3-10.4K/14.5K inhibit TNF cytolysis is by inhibiting TNF activation of cPLA,. cPLA, cleaves arachidonic acid (AA) specifically from membrane phospholipids; therefore, cPLA, activity was measured by the release of H-3-AA from cells prelabeled with H-3-AA. Uninfected cells or cells infected with wild-type Ad were not lysed and did not release H-3-AA in response to TNF. In contrast, TNF treatment induced cytolysis and H-3-AA release in uninfected cells sensitized to TNF by treatment with cycloheximide and also in infected cells sensitized to TNF by expression of E1A. In C127 cells, in which either E3-14.7K or E3-10.4K/14.5K inhibits TNF cytolysis, either set of proteins inhibited TNF-induced release of H-3-AA. In C3HA cells, in which E3-14.7K but not E3-10.4K/14.5K prevents TNF cytolysis, E3-14.7K but not E3-10.4K/14.5K prevented TNF-induced release of H-3-AA, When five virus mutants with lesions in E3-14.7K were examined, there was a perfect correlation between a mutant's ability to inhibit both TNF-induced cytolysis and release of H-3-AA. E3-14.7K expressed in two stably transfected C127 cell lines prevented both TNF-cycloheximide-induced cytolysis and release of H-3-AA. The E3 proteins also prevented TNF-induced cytolysis and release of H-3-AA in mouse L929 cells, which are spontaneously sensitive to TNF. TNF cytolysis was blocked by dexamethasone, an inhibitor of PLA, activity, and by nordihydroquaiaretic acid, which inhibits the metabolism of AA to the leukotrienes. Indomethacin, which blocks the formation of prostaglandins from AA, did not inhibit TNF cytolysis. The leukotrienes and prostaglandins are amplifiers of the inflammatory response. We propose that E3-14.7K and E3-10.4K/14.5K function independently in Ad infection to inhibit both cytolysis and inflammation induced by TNF.