The goal of the present study is to elucidate the modulatory effect of lipid compositions on phospholipase A2 (PLA2) activity. Sphingomyelin (SM) incorporation inhibited catalytic activity and membrane-damaging activity of native and mutated PLA2 toward egg yolk phosphatidylcholine (EYPC) vesicles. The inhibitory effects were through the reduction of membrane fluidity and modulation of the mode of membrane binding of PLA2 at water/lipid interface. The modulated effect of SM depended on inherent structural elements of PLA2. Moreover, cholesterol (Chol) incorporation into EYPC/egg yolk sphingomyelin (EYSM) vesicles relieved the inhibitory effect of sphingomyelin on PLA2 activity via lipid domain formation by SM and Chol. The effects on the interactive mode of PLA2 with phospholipids induced by the physical state changes of membrane bilayers abolished the inhibition of SM on catalytic activity and membrane-damaging activity of PLA2. Additionally, quercetin incorporation increased PLA2 activity and membrane-damaging activity toward EYPC/SM vesicles via its raft-making effect. Quercetin incorporation reduced PLA2 activity and membrane-damaging activity toward EYPC/SM/Chol vesicles via its raft-breaking effect. Membrane-inserted quercetin affected on membrane structure and membrane-bound mode of PLA2 to modulate PLA2 interfacial activity and membrane-damaging activity. Finally, studies on the effects of phosphatidylserine (PS) content on the sensitivity of lipid vesicles mimicking inner and outer plasma membrane toward PLA2 activity revealed that the membrane-binding mode adopted by PLA2 depended on the lipid composition. The effects of PS content on the extent of lipid domain formation and the conformation of PLA2 adopted at water-lipid interface modulate PLA2 catalytic activity. Collectively, these results indicate that lipid composition modulates PLA2 activity via its effects on membrane structure and membrane-bound mode of PLA2