A new model for lateral diffusion, the milling crowd model (MC), is proposed and is used to derive the dependence of the monomeric and excimeric fluorescence yields of excimeric membrane probes on their concentration. According to the MC model, probes migrate by performing spatial exchanges with a randomly chosen nearest neighbor (lipid or probe). Only nearest neighbor probes, one of which is in the excited state, may form an excimer. The exchange frequency, and hence the local lateral diffusion coefficient, may then be determined from experiment with the aid of computer simulation of the excimer formation kinetics. The same model is also used to study the long-range lateral diffusion coefficient of probes in the presence of obstacles (e.g., membrane proteins). The dependence of the monomeric and excimeric fluorescence yields of 1-pyrene-dodecanoic acid probes on their concentration in the membranes of intact erythrocytes was measured and compared with the prediction of the MC model. The analysis yields an excimer formation rate for nearest neighbor molecules of approximately 1 X 10(7) s-1 and an exchange frequency of approximately greater than 2 X 10(7) s-1, corresponding to a local diffusion coefficient of greater than 3 X 10(-8) cm2 s-1. This value is several times larger than the long-range diffusion coefficient for a similar system measured in fluorescence photobleaching recovery experiments. The difference is explained by the fact that long-range diffusion is obstructed by dispersed membrane proteins and is therefore greatly reduced when compared to free diffusion. The dependence of the diffusion coefficient on the fractional area covered by obstacles and on their size is derived from MC simulations and is compared to those of other theories lateral diffusibility.