Soluble cytochrome P-450 from bovine adrenocortical mitochrondria, capable of side chain cleavage, can be incorporated into membranes prepared by dispersion of phospholipids in aqueous buffer when cholate is added to the membrane suspension. In addition, the complete protein side chain cleavae system (i.e. including the ancillary proteins adrenodoxin and adrenodoxin reductase and the substrate cholesterol) can be incorporated into such membranes so that on addition of TPNH, pregnenolone is formed. These components remain in the membrane through gel filtration (which removes almost all the cholate) and sedimentation through sucrose density gradients which separate vesicles without protein and soluble enzyme from the membrane-bound P-450 remains associated with the membrane during and following lysis of vesicles. The vesicles which do not leak [14C]glucose were seen on electron microscopy to show a mean diameter of 350 to 450 A. A number of phospholipids are capable of accomodating P-450 in this manner: mitochondrial lipid extracts, synthetic dipalmitoyl phosphatidylcholine, synthetic dipalmitoyl phosphatidylserine, and egg lecithin, separately or in various combinations. Cholesterol is not necessary for incorporation of the side chain cleavage system. Membrane-bound P-450 shows a Vmax of 28.1 nmol of pregnenolone/min/mg of protein, more than 10 times that of soluble P-450. The spectral properties of the soluble P-450 are altered to become predominantly low spin in the membrane and the enzyme is more stable at 4 degrees C than is soluble p-450.