Formation of bis(monoacylglycero)phosphate (BMP) from lysophosphatidyl[U-14C]glycerol was studied in rabbit pulmonary alveolar macrophages. The majority of the activity was found in the particulate fraction (lysosome-enriched) sedimenting between 2000 and 12,000 rpm and it was maximal at pH 4.5. The activity in this fraction was stimulated by 2-mercaptoethanol and additional lipids from the fraction and inhibited by 5 mM CaCl2, 0.5 mM acyl-CoA, 1.0 mM chlorpromazine and by detergents, whereas chloroquine, cholesterol and butanol had no effect. The activity was retained by the particles after repeated freezing and thawing. After treatment with n-butanol, most of the activity was lost, but 84% could be recovered in the aqueous phase if the butanol-extracted lipids were added back giving an activity of 266 nmol/h per mg of protein. Lipids most effective in restoring activity were the total lipids extracted by butanol from the particulate fraction, fractions of the total lipids containing phospholipids and phosphatidylcholine from both native and commercial sources, with native BMP and commercial phosphatidylglycerol and sphingomyelin having a much smaller effect. The complexity of the lipid requirements was further indicated by the finding that addition of pure lipids to the total lipid extract reduced the efficacy of the latter. A direct transfer of [14C]oleic acid to BMP from labelled macrophage microsomal lipids was catalyzed by the soluble enzymes as was transfer from dioleoylphosphatidylcholine in the presence of lysophosphatidylglycerol. The particulate enzyme also catalyzed the transfer of [14C]oleic acid from 2-oleoylphosphatidylcholine to BMP in the presence of lysophosphatidylglycerol. These findings indicate that the transacylase involved in conversion of lysophosphatidylglycerol to BMP utilizes complex lipids other than phosphatidylinositol as acyl donors and has complex requirements for lipids as physicochemical activators. They further suggest that the transacylation might be catalyzed by lysosomal phospholipase A2.