The interaction of a soluble homogeneous preparation of D-beta-hydroxybutyrate apodehydrogenase with phospholipid was studied in terms of restoration of enzymic activity and complex formation. The purified apoenzyme, which is devoid of lipid, is inactive. It is reactivated specifically by the addition of lecithin or mixtures of phospholipids containing lecithin. Mitochondrial phospholipid, i.e. the mixture of phospholipids in mitochondria, reactivates with the highest specific activity (approximately 100 micromol of DPN reduced/min/mg at 37 degrees and with the greatest efficiency (2.5 to 4 mol of lecithin/mol of enzyme subunit). Each of the lecithins of varying chain length and unsaturation reactivated the enzyme, albeit to differing extents and efficiencies. In general, lecithins containing unsaturated fatty acid moieties reactivated better than those containing the comparable saturated lipid. Optimal reactivation can be obtained for the various lecithins when they are microdispersed together with phosphatidylethanolamine. When the lecithins are added microdispersed together with both phosphatidylethanolamine and cardiolipin, maximal efficiency is obtained. Also, PC6:0 and 8:0 reactivate as soluble molecules, so that a phospholipid bilayer is not necessary to reactivate the enzyme. Complex formation was studied using gel exclusion chromatography. It can be shown that each of the phospholipids which reactivate combines with the apoenzyme. Mitochondrial phospholipid, which reactivates the best, binds most effectively; PC8:0, which reactivates with poor efficiency, can be shown to bind with low affinity, and negligible binding occurs at concentrations which do not reactivate the enzyme. Since the apoenzyme is apparently homogeneous and devoid of phospholipid or detergents, it would appear that reactivation does not involve reversal of inhibition such as by removal of a regulatory subunit or detergent from the catalytic subunit. Rather, we conclude that phospholipid is a necessary and integral portion of this enzyme whose active form is a phospholipid-protein complex. The apoenzyme also forms a complex with phosphatidylethanolamine and/or cardiolipin, which do not reactivate enzymic activity. Salt dissociates such complexes in contrast with the lecithin-apoenzyme complex. Binding of phospholipid is a necessary but not sufficient requisite for enzymic activity. The same energies of activation are obtained from Arrhenius plots for the membrane-bound enzyme and for the purified soluble enzyme reactivated with mitochondrial phospholipid or different lecithins. This observation is compatible with the view that the purified enzyme has not been adversely modified in the isolation. Furthermore, essentially the same energies of activation were obtained for saturated lecithins below their transition temperatures and for unsaturated lecithins above their transition temperatures. Hence, there is no indication that a lipid phase transition occurs to influence the activity of this enzyme.