AbstractBackgroundPhospholipase D3 (PLD3) is a protein of unclear function that structurally resembles other members of the phospholipase D superfamily. A coding variant in this gene confers increased risk for the development of Alzheimer’s disease (AD), although the magnitude of this effect has been controversial.MethodBecause of potential significance, we undertook a study to determine whether PLD3 is relevant to memory and cognition in sporadic AD, to observe its distribution in normal human brain and AD‐affected brain, to describe its subcellular localization, and to evaluate its molecular function.ResultPLD3 mRNA levels in the human pre‐frontal cortex inversely correlated with β‐amyloid pathology severity and rate of cognitive decline in the Religious Orders Study and Rush Memory and Aging Project. PLD3 levels across genetically diverse BXD mouse strains and strains crossed with 5xFAD mice correlated strongly with learning and memory performance in a fear conditioning task. In human neuropathological samples, PLD3 was primarily found within neurons and colocalized with lysosome markers. This colocalization was also present in AD brain with prominent enrichment on lysosomal accumulations within dystrophic neurites surrounding β‐amyloid plaques. This distribution was conserved in mouse brain in wild type and the 5xFAD mouse model of cerebral β‐amyloidosis. We discovered PLD3 has phospholipase D activity in lysosomes. The V232M coding variant significantly reduced enzymatic activity compared to wild‐type PLD3.ConclusionIn summary, this study identified a new functional mammalian phospholipase D isoform which is lysosomal and closely associated with β‐amyloid pathology, dystrophic neurites and memory in sporadic AD.