In vivo and in vitro experiments were performed to determine how phenethyl alcohol (PEA) inhibits phospholipid synthesis in Escherichia coli. This drug drastically reduced the rate of incorporation of sn-glycerol 3-phosphate into the phospholipids of an sn-glycerol 3-phosphate auxotroph. PEA also reduced the rate of fatty acid incorporation into the phospholipids of a fatty acid auxotroph. The kinetics of PEA inhibition of the rate of incorporation of sn-glycerol 3-phosphate were almost identical to those of PEA inhibition of the rate of fatty acid incorporation into phospholipids. The in vivo experiments suggested that the rate-limiting step(s) in phospholipid biosynthesis inhibited by PEA is at the level of the acylation of sn-glycerol 3-phosphate or beyond this step. PEA inhibited the sn-glycerol 3-phosphate acyltransferase with either palmitoyl coenzyme A or palmitoyl-acyl carrier protein as the acyl donor. This drug, however, had no effect on the cytidine 5'-diphosphate-diglyceride:glycerol 3-phosphate phosphatidyl transferase, cytidine 5'-diphosphate-diglyceride:L-serine phosphatidyl transferase, and acyl coenzyme A:lysophatidic acid acyltransferase. The in vitro findings suggested that PEA inhibits phospholipid synthesis primarily at the level of sn-glycerol 3-phosphate acyltransferase.