A method is reported for the modification of lipids in situ in chloroplast membrane by which a homogeneous, water-soluble catalyst Pd(QS)2 (QS, sulphonated alizarine; C14H6O7NaS) is incorporated into the thylakoids of isolated chloroplast. The catalyst itself did not affect the photosynthetic activity but caused an extensive loss of unsaturated fatty acids in the presence of hydrogen gas. The polyunsaturated fatty acids were hydrogenated at a faster rate than the monoenoic acids. During hydrogenation the orientational ordering of membrane lipids, as measured with the C-12 positional isomer of spin-labelled stearic acid, displayed a slight increase in agreement with the alterations in membrane composition. Progressive saturation of double bonds of lipids primarily inhibits electron transport between the photosystems followed by the inhibition of electron flow around photosystem II. Photosystem I electron transport was not inhibited even by 50% fatty acid hydrogenation. We suggest that using Pd(QS)2 catalyst for thylakoid hydrogenation offers an excellent technique to study the role of various unsaturated fatty acids in the regulation of membrane fluidity and photosynthetic processes.