Ecto-5'-nucleotidase (E5'N, CD73) is key enzyme responsible for formation of anti-inflammatory and immunosuppressive adenosine from extracellular nucleotides as well as an important surface molecule involved in cellular signalling. In this study we provide evidence that the pro-inflammatory cytokine, tumour necrosis factor-alpha (TNF-alpha) may reduce the capacity of human endothelial cells to produce adenosine by a decrease in surface expression and in the activity of E5'N. Human umbilical vein endothelial cells incubated for 24 h with TNF-alpha lost 54% of the activity of E5'N while activities of the other enzymes involved in adenosine metabolism remained unaffected. Immunofluorescence staining with anti-E5'N (1E9) following exposure to TNF-alpha, showed reduced numbers of positive cells. TNF-alpha induced down-regulation of E5'N was prevented by addition of the PLC inhibitor neomycin, but not by inhibitors of MAPK-like pathways (MEK and p38). Therefore, we conclude that TNF-alpha through activation of endogenous PLC leads to cleavage of the GPI-linkage of E5'N resulting in loss of E5'N from the extracellular surface. This change may lead to decrease in formation of adenosine and could be an important mechanism of endothelial activation during inflammation.