The effect of phospholipid, 1,2-Dipalmitoyl-sn-glycero-3-Phosphocholine (DPPC) on the spectroscopy of the cyanine dye, 1-ethyl-1’-octadecyl-2,2’-cyanine iodide (PIC-18), has been investigated using UV-Vis spectroscopy. Vesicles of DPPC containing PIC-18 in the molar ratio of 1:3 (dye/phospholipids) were prepared in aqueous solution. J-aggregates of PIC-18 were detected in the bilayer wall of the vesicles. When an aqueous solution of mixed PIC-18/DPPC vesicles is treated with excess DPPC vesicles that are prepared separately, the dye molecules in the mixed vesicles underwent a rapid (aggregate)n' n(monomer) equilibrium as the appearance of only one isosbestic point in the absorbance of the dye indicates. The equilibrium constant was calculated at room temperature (Keq = 6.7x10-2). An aggregation number of 4 was calculated for the dye in the bilayer vesicles.