When liver microsomes were incubated with phospholipase C, microsomal phospholipids were linearly hydrolyzed during 10 min of incubation. Coincident with the decrease in microsomal phospholipid content by phospholipase C treatment, the chain elongation activity also decreased linearly. The decreased chain elongation activity in phospholipase C-treated microsomes was completely or partially recovered by the addition of a sonicated dispersion of phosphatidylcholine, microsomal phospholipids or phosphatidylcholine/phosphatidylethanolamine mixtures. The extent of recovery of decreased activity by a sonicated dispersion of phosphatidylcholine/phosphatidylethanolamine mixture was gradually reduced by increasing amounts of phosphatidylethanolamine in the dispersion. In addition, the chain elongation activity in native microsomes was more stimulated by the addition of a sonicated dispersion of phosphatidylcholine alone than by that of phosphatidylcholine/phosphatidylethanolamine mixtures. The chain elongation activity of palmitoyl-CoA was inhibited by the addition of stearoyl-CoA, which is the end-product of this reaction. The inhibitory effect of stearoyl-CoA was partially eliminated by the addition of a sonicated dispersion of phosphatidylcholine. The increase of the chain elongation activity in native and phospholipase C-treated microsomes by the addition of a sonicated dispersion of phosphatidylcholine was not related to the activity of fatty acyl-CoA hydrolase.