1-Acyl-2-(7-(4-azido-2-nitrophenoxy)-[1-14C]heptanoly)-sn-glycero-3-phosphocholine was synthesized in order to study the lipid-binding site of the phosphatidylcholine exchange protein from bovine liver. Photosensitive phosphatidylcholine was incorporated into the protein by incubation with vesicles of this phosphatidylcholine derivative. The lipid-protein complex was separated from the vesicles by chromatography on Biogel A-0.5m. Photolysis of the complex by irradiation with light of a high pressure mercury lamp at a wavelength above 340 nm generated the highly reactive nitrene. Sodium dodecyl sulfate gel electrophoresis of the photolysed complex indicated that 30% of the endogenous 14C-labeled phosphatidylcholine was covalently linked to the protein. Peptides were isolated after digestion of the photolysed complex with protease from Staphylococcus aureus and trypsin. It was determined that the 2-acyl chain of the phosphatidylcholine molecule was linked to the peptide segment -Gly-Ser-Lys-Val-Phe-Met-Tyr-Tyr-. This segment was part of a protease peptide of about 65 residues of which the sequence was determined by Edman degradation for the first 38 residues. This peptide contains a cluster of apolar residues -Val-Phe-Met-Tyr-Tyr-Phe with an extremely high hydrophobicity index and with a predicted beta-sheet conformation. It is concluded that this hydrophobic cluster forms part of the binding site.