We have studied the binding of dansyl propranolol to lipid bilayers and to the (Ca2+ + Mg2+)-ATPase of sarcoplasmic reticulum. The fluorescence emission spectra for dansyl propranolol bound to the ATPase system can be fitted to the sum of three peaks, characteristic of probe bound to lipid and to protein and free in solution, respectively. Titrations show that binding to the lipid component of the ATPase system is comparable to binding to simple lipid bilayers. Binding constants obtained using fluorescence spectroscopy for binding to lipid bilayers agree with constants obtained from microelectrophoresis measurements. Binding to sites on the ATPase can be described either in terms of the aqueous concentration of dansyl propranolol or in terms of the mole fraction of dansyl propranolol in the lipid phase of the membrane. Both descriptions suggest extensive binding to annular sites at the lipid/protein interface of the ATPase. Binding at other sites on the ATPase might also be present. Binding of dansyl propranolol to the ATPase results in a marked inhibition of activity. At high Ca2+ concentrations, inhibition fits to a non-competitive model of inhibition, described by a Ki of 5 microM. We attribute this effect to binding at annular sites. At lower Ca2+ concentration, a decrease is observed in the apparent affinity of the ATPase for Ca2+ which can be attributed to a build-up of positive charge on the membrane as a result of binding.