Cyclic phosphatidic acid (cPA) is a lipid mediator, which regulates adipogenic differentiation and glucose homeostasis by suppressing nuclear peroxisome proliferator-activated receptor γ (PPARγ). Glycerophosphodiesterase 7 (GDE7) is a Ca2+-dependent lysophospholipase D that localizes in the endoplasmic reticulum. Although mouse GDE7 catalyzes cPA production in a cell-free system, it is unknown whether GDE7 generates cPA in living cells. Here, we demonstrate that human GDE7 possesses cPA-producing activity in living cells as well as in a cell-free system. Furthermore, the active site of human GDE7 is directed towards the luminal side of the endoplasmic reticulum. Mutagenesis revealed that amino acid residues F227 and Y238 are important for catalytic activity. GDE7 suppresses the PPARγ pathway in human mammary MCF-7 and mouse preadipocyte 3T3-L1 cells, suggesting that cPA functions as an intracellular lipid mediator. These findings lead to a better understanding of the biological role of GDE7 and its product, cPA.