1. After conventional fractionation of rat liver homogenates in 0.88m-sucrose the mitochondrial fraction was subjected to short-term water lysis followed by separation of the resulting membrane preparations. 2. Phosphatidate formation was measured in all subcellular fractions and subfractions and was compared with the distribution of succinate dehydrogenase, monoamine oxidase, rotenone-insensitive NADH cytochrome c reductase, arylsulphatase, urate oxidase, arylesterase and glucose 6-phosphatase. 3. The results obtained indicated that mitochondria were capable of synthesizing phosphatidate, though this activity was only about one-third of the total homogenate activity. 4. Mitochondrial phosphatidate formation was located predominantly in the outer mitochondrial membrane. Although this membrane preparation was found to be significantly contaminated by the microsomal fraction, this contamination was estimated to account for not more than about 20% of the total phosphatidate formation observed in preparations of outer mitochondrial membrane.