It is unclear how the cytosolic sterol carrier protein-2 (SCP-2) binds sterols and enhances sterol transfer between membranes. Therefore, human recombinant SCP-2 was used in conjunction with phase fluorometry, dialysis, and chemical labeling techniques to show if a direct membrane effect accounted for this activity. SCP-2 directly interacted with L-cell fibroblast plasma membrane vesicles as determined by increased fluorescence anisotropy of coumarin-labeled protein (CPM-SCP-2). Furthermore, a new fluorescence lifetime component due to plasma membrane-bound CPM-SCP-2 was observed. Dialysis studies with 3H- cholesterol loaded plasma membranes indicated that SCP-2, added to the donor compartment, stimulated sterol transfer whether or not the dialysis membrane was permeable to SCP-2. Nevertheless, ligand-binding experiments indicated that chemically blocking the SCP-2 sterol binding site inhibited the ability of SCP-2 to enhance sterol transfer between plasma membrane vesicles. SCP-2 did not stimulate plasma membrane fusion. Addition of SCP-2 to plasma membranes increased the anisotropy plasma membrane proteins covalently reacted with CPM, but not that of lipids labeled with the fatty acid analogue octadecyl rhodamine B. In conclusion, the data are consistent with SCP-2 stimulating intermembrane sterol transfer by direct interaction with sterol in the membrane and enhancing its desorption from the membrane.