We recently demonstrated that cotyledons of cotton (Gossypium hirsutum 1.) seedlings synthesize N-acylphosphatidylethanolamine (NAPE), an unusual acylated derivative of phosphatidylethanolamine (PE), during postgerminative growth (K.D. Chapman and T.S. Moore [1993] Arch Biochem Biophys 301: 21-33). Here, we report the discovery of an acyltransferase enzyme, fatty acid: diacylphosphatidylethanolamine N-acyltransferase (designated NAPE synthase), that synthesizes NAPE from PE and free fatty acids (FFA) in cottonseed microsomes. ["CINAPE was synthesized from ["C]palmitic acid and endogenous PE in a time-, pH-, temperature-, and protein concentration-dependent manner. ]palmitic acid into NAPE at low concentrations (10 p~, highaffinity site) but not at high concentrations (50 PM, low-affinity site), indicating that the two putative sites can be distinguished by their fatty acid preferences.