Very extensive hydrolysis of phospholipids with pure Bacillus cereus phospholipase C at 5 degrees C greatly inhibited the maximum demonstrable rate of glucuronidation of p-nitrophenol by UDPglucuronyltransferase in guinea pig liver microsomes. Lysophosphatidylcholine restored much of the inhibited activity but non-phospholipid surfactants or hydrolysis of diglycerides failed to reactivate. Phospholipid depletion likewise inhibited o-aminophenol glucuronidation and phospholipids restored activity. It is concluded that glucuronyltransferase specifically requires phospholipids for optimal activity. It seems unlikely that these phospholipids only serve to dissolve aglycones, or that they are direct physiological regulators of the transferase. Instead, a permissive role is ascribed to phospholipids, allowing glucuronyltransferase to be regulated by other means.