A simple experimental system was developed for studying the movement of long-chain fatty acids between multilamellar liposomes and soluble proteins capable of binding fatty acids. Oleic acid was incorporated into multilamellar liposomes containing cholesterol and egg yolk lecithin and incubated with albumin or hepatic fatty acid-binding protein. It was found that the fatty acid transferred from the liposomes to either protein rapidly and selectively under conditions where phospholipid and cholesterol transfer did not occur. More than 50% of the fatty acid contained within liposomes could become protein bound, suggesting that the fatty acid moved readily between and across phospholipid bilayers. Transfer was reduced at low pH, and this reduction appeared to result from decreased dissociation of the protonated fatty acid from the bilayer. Liposomes made with dimyristoyl or dipalmitoyl lecithin and containing 1 mol per cent palmitic acid were used to show the effect of temperature on fatty acid transfer. Transfer to either protein did not occur at temperatures where the liposomes were in a gel state but occurred rapidly at temperatures at or above the transition temperatures of the phospholipid used.