Phospholipase A2, group VII (PLA2G7) is widely recognized as a secreted, lipoprotein-associated PLA2 in plasma that converts phospholipid platelet-activating factor (PAF) to a biologically inactive product Lyso-PAF during inflammatory response. We report that intracellular PLA2G7 is selectively important for cell proliferation and tumor growth potential of melanoma cells expressing mutant NRAS, but not cells expressing BRAF V600E. Mechanistically, PLA2G7 signals through its product Lyso-PAF to contribute to RAF1 activation by mutant NRAS, which is bypassed by BRAF V600E. Intracellular Lyso-PAF promotes p21-activated kinase 2 (PAK2) activation by binding to its catalytic domain and altering ATP kinetics, while PAK2 significantly contributes to S338-phosphorylation of RAF1 in addition to PAK1. Furthermore, the PLA2G7-PAK2 axis is also required for full activation of RAF1 in cells stimulated by epidermal growth factor (EGF) or cancer cells expressing mutant KRAS. Thus, PLA2G7 and Lyso-PAF exhibit intracellular signaling functions as key elements of RAS-RAF1 signaling.