The purified ATPase of sarcoplasmic reticulum was covalently labeled with N-iodoacetyl-N'-(5-sulfo-1-naphthyl)ethylenediamine (1,5-IAEDANS) or with iodoacetamidofluorescein (IAF). In reconstituted vesicles containing both types of ATPase molecules fluorescence energy transfer was observed from the IAEDANS (donor) to the IAF (acceptor) fluorophore as determined by the ratio of donor and acceptor fluorescence intensities, and by nanosecond decay measurements of donor fluorescence in the presence or absence of the acceptor. The observed energy transfer may arise by random collisions between ATPase molecules due to Brownian motion or by formation of complexes containing several ATPase molecules. Experimental distinction between these two models of energy transfer is possible based on predictions derived from mathematical models. Up to tenfold dilution of the lipid phase of reconstituted vesicles with egg lecithin had no measurable effect upon the energy transfer, suggesting that random collision between ATPase molecules in the lipid phase is not the principal cause of the observed effect. Addition of unlabeled ATPase in five- to tenfold molar excess over the labeled molecules abolished energy transfer. These observations together with electron microscopic and chemical cross-linking studies support the existence of ATPase oligomers in the membrane with sufficiently long lifetimes for energy transfer to occur. A hypothetical equilibrium between monomeric and tetrameric forms of the ATPase governed by the membrane potential is proposed as the structural basis of the regulation of Ca uptake and release by sarcoplasmic reticulum membranes during muscle contraction and relaxation.