Phospholipase C zeta (PLCζ) is a candidate sperm-borne oocyte activating factor (SOAF) which has recently received attention as a potential biomarker of human male infertility. However, important SOAF attributes of PLCζ, including its developmental expression in mammalian spermiogenesis, its compartmentalization in sperm head perinuclear theca (PT) and its release into the ooplasm during fertilization have not been established and are addressed in this investigation. Different detergent extractions of sperm and head/tail fractions were compared for the presence of PLCζ by immunoblotting. In both human and mouse, the active isoform of PLCζ was detected in sperm fractions other than PT, where SOAF is expected to reside. Developmentally, PLCζ was incorporated as part of the acrosome during the Golgi phase of human and mouse spermiogenesis while diminishing gradually in the acrosome of elongated spermatids. Immunofluorescence localized PLCζ over the surface of the postacrosomal region of mouse and bull and head region of human spermatozoa leading us to examine its secretion in the epididymis. While previously thought to have strictly a testicular expression, PLCζ was found to be expressed and secreted by the epididymal epithelial cells explaining its presence on the sperm head surface. In vitro fertilization (IVF) revealed that PLCζ is no longer detectable after the acrosome reaction occurs on the surface of the zona pellucida and thus is not incorporated into the oocyte cytoplasm for activation. In summary, we show for the first time that PLCζ is compartmentalized as part of the acrosome early in human and mouse spermiogenesis and is secreted during sperm maturation in the epididymis. Most importantly, no evidence was found that PLCζ is incorporated into the detergent-resistant perinuclear theca fraction where SOAF resides.