When carnitine palmitoyltransferase is purified it shows increasing substrate inhibition by palmitoyl-CoA as the protein content of the assay mixture is decreased. The purified enzyme is stimulated by addition of phospholipids (phosphatidylcholine, cardiolipin) and proteins (albumin, fatty acid-binding protein, lambda-globulin) to the reaction mixture. The effects of phospholipid and protein are more than additive, particularly with relatively high concentrations of palmitoyl-CoA. It is suggested that the enzyme contains hydrophobic sites which require phospholipid to prevent spurious binding of palmitoyl-CoA and which normally anchor the enzyme to the mitochondrial membrane.