It has been proposed that the neurotoxicity observed in severely jaundiced infants results from the binding of unconjugated bilirubin to nerve cell membranes. However, despite potentially important clinical ramifications, there remains significant controversy regarding the physical nature of bilirubin-membrane interactions. We used the technique of parallax analysis of fluorescence quenching (Chattopadhyay, A., and E. London. 1987. Biochemistry. 26: 39;-45) to measure the depth of penetration of bilirubin in model phospholipid bilayers. The localization of unconjugated bilirubin and ditaurobilirubin within small unilamellar vesicles composed of dioleoylphosphatidylcholine was determined through an analysis of the quenching of bilirubin fluorescence by spin-labeled phospholipids, and by bilirubin-mediated quenching of a series of anthroyloxy fatty acid probes at various depths within the membrane bilayer. Findings were further verified with potassium iodide as an aqueous quencher. Our results indicate that, at pH 10, unconjugated bilirubin localizes approximately 20 A from the bilayer center, in the region of the polar head groups. Further analyses suggest a modest influence of pH, membrane cholesterol content, and vesicle diameter on the bilirubin penetration depth. Taken together, these data support that, under physiologic conditions, bilirubin localizes to the polar region of phospholipid bilayers, near the membrane-water interface.