Phosphatidylethanol (Peth) formation catalyzed by the transphosphatidylation activity of phospholipase D was demonstrated to occur in a rat brain synaptosomal enriched preparation. The optimal pH was determined to be 6.5, and the optimal ethanol concentration was determined to be 0.3-0.4 M with an apparent Km of 0.2 M. Peth formation was barely detectable in the absence of an appropriate activator and several unsaturated fatty acids were found to be effective activators. The concentrations of oleic acid required for maximum activation varied with the concentration of exogenous phosphatidylcholine present in the incubation mixtures. All detergents tested were significantly less active than the unsaturated fatty acids and divalent ions were not required for Peth formation. Phosphatidylcholine was the most effective phosphatidyl donor of the phospholipids tested. Peth forming activity was greatest in the synaptic membrane fraction of the various brain subfractions examined. The 12,000 g-100,000 g particulate fraction of lung, heart, and adipose tissue had activities similar to that of brain.