Purified rat liver microsomal cytochrome P-450 and NADPH-cytochrome P-450 reductase were co-reconstituted in phosphatidylcholine-phosphatidylethanolamine-phosphatidylserine vesicles using a cholate dialysis technique. The co-reconstitution of the enzymes was demonstrated in proteoliposomes fractionated by centrifugation in a glycerol gradient. The proteoliposomes catalyzed the N-demethylation of a variety of substrates. Rotational diffusion of cytochrome P-450 was measured by detecting the decay of absorption anisotropy r(t), after photolysis of the heme.CO complex by a vertically polarized laser flash. The rotational mobility of cytochrome P-450, when reconstituted alone, was found to be dependent on the lipid to protein ratio by weight (L/P450) (Kawato, S., Gut, J., Cherry, R. J., Winterhalter, K. H., and Richter, C. (1982) J. Biol. Chem. 257, 7023-7029). About 35% of cytochrome P-450 was immobilized and the rest was rotating with a mean rotational relaxation time phi 1 of about 95 mus in L/P450 = 1 vesicle. In L/P450 = 10 vesicles, about 10% of P-450 was immobile and the rest was rotating with phi 1 congruent to 55 mus. Co-reconstitution of equimolar amounts of NADPH-cytochrome P-450 reductase into the above vesicles results in completely mobile cytochrome P-450 with a phi 1 congruent to 40 mus. Only a small decrease in the immobile fraction of cytochrome P-450 is observed when the molar ratio of cytochrome P-450 to the reductase is 5. The results suggest the formation of a monomolecular 1:1 complex between cytochrome P-450 and NADPH-cytochrome P-450 reductase in the liposomes.