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Phospholipase A2 (PLA2; EC 3.1.3.4) catalyzes the first step of the production of proinflammatory compounds collectively known as eicosanoids. The binding of phospholipid substrates to PLA2 occurs through a well formed hydrophobic channel. Surface plasmon resonance studies have shown that niflumic acid binds to Naja naja sagittifera PLA2 with an affinity that corresponds to a dissociation constant (Kd) of 4.3 × 10-5 M. Binding studies of PLA2 with niflumic acid were also carried out using a standard PLA2 kit that gave an approximate binding constant, Ki, of 1.26 ± 0.05 × 10-6 M. Therefore, in order to establish the viability of PLA2 as a potential target molecule for drug design against inflammation, arthritis and rheumatism, the three-dimensional structure of the complex of PLA2 with the known anti-inflammatory agent niflumic acid {2-[3-(trifluoromethyl)anilino]nicotinic acid} has been determined at 2.5 Å resolution. The structure of the complex has been refined to an R factor of 0.187. The structure determination reveals the presence of one niflumic acid molecule at the substrate-binding site of PLA2. It shows that niflumic acid interacts with the important active-site residues His48 and Asp49 through two water molecules. It is observed that the niflumic acid molecule is completely buried in the substrate-binding hydrophobic channel. The conformations of the binding site in PLA2 as well as that of niflumic acid are not altered upon binding. However, the orientation of the side chain of Trp19, which is located at the entry of the substrate-binding site, has changed from that found in the native PLA2, indicating its familiar role.