Steady-state and time-resolved fluorescence spectroscopy has been used to examine lateral diffusion in dipalmitoyl-L-alpha-phosphatidylcholine (DPPC) and dimyristoyl-L-alpha-phosphatidylcholine (DMPC) monolayers at the air-water interface, by studying the fluorescence quenching of a pyrene-labeled phospholipid (pyrene-DPPE) by two amphiphilic quenchers. Steady-state fluorescence measurements revealed pyrene-DPPE to be homogeneously distributed in the DMPC lipid matrix for all measured surface pressures and only in the liquid-expanded (LE) phase of the DPPC monolayer. Time-resolved fluorescence decays for pyrene-DPPE in DMPC and DPPC (LE phase) in the absence of quencher were best described by a single-exponential function, also suggesting a homogeneous distribution of pyrene-DPPE within the monolayer films. Addition of quencher to the monolayer film produced nonexponential decay behavior, which is adequately described by the continuum theory of diffusion-controlled quenching in a two-dimensional environment. Steady-state fluorescence measurements yielded lateral diffusion coefficients significantly larger than those obtained from time-resolved data. The difference in these values was ascribed to the influence of static quenching in the case of the steady-state measurements. The lateral diffusion coefficients obtained in the DMPC monolayers were found to decrease with increasing surface pressure, reflecting a decrease in monolayer fluidity with compression.