Autotaxin is the enzyme responsible for the production of lysophosphatidic acid (LPA) from lysophosphatidyl choline (LPC), and it is up-regulated in many inflammatory conditions, including but not limited to cancer, arthritis, and multiple sclerosis. LPA signaling causes angiogenesis, mitosis, cell proliferation, and cytokine secretion. Inhibition of autotaxin may have anti-inflammatory properties in a variety of diseases; however, this hypothesis has not been tested pharmacologically because of the lack of potent inhibitors. Here, we report the development of a potent autotaxin inhibitor, PF-8380 [6-(3-(piperazin-1-yl)propanoyl)benzo[d]oxazol-2(3H)-one] with an IC(50) of 2.8 nM in isolated enzyme assay and 101 nM in human whole blood. PF-8380 has adequate oral bioavailability and exposures required for in vivo testing of autotaxin inhibition. Autotaxin's role in producing LPA in plasma and at the site of inflammation was tested in a rat air pouch model. The specific inhibitor PF-8380, dosed orally at 30 mg/kg, provided >95% reduction in both plasma and air pouch LPA within 3 h, indicating autotaxin is a major source of LPA during inflammation. At 30 mg/kg PF-8380 reduced inflammatory hyperalgesia with the same efficacy as 30 mg/kg naproxen. Inhibition of plasma autotaxin activity correlated with inhibition of autotaxin at the site of inflammation and in ex vivo whole blood. Furthermore, a close pharmacokinetic/pharmacodynamic relationship was observed, which suggests that LPA is rapidly formed and degraded in vivo. PF-8380 can serve as a tool compound for elucidating LPA's role in inflammation.