The enzymatic activity of the peripheral membrane protein, phosphatidylinositol-specific phospholipase C (PI-PLC), is increased by nonsubstrate phospholipids with the extent of enhancement tuned by the membrane lipid composition. For Bacillus thuringiensis PI-PLC, a small amount of phosphatidylcholine (PC) activates the enzyme toward its substrate PI; above 0.5 mol fraction PC (X PC ), enzyme activity decreases substantially. To provide a molecular basis for this PC-dependent behavior, we used fluorescence correlation spectroscopy to explore enzyme binding to multicomponent lipid vesicles composed of PC and anionic phospholipids (that bind to the active site as substrate analogues) and high resolution field cycling 31 P NMR methods to estimate internal correlation times ( c ) of phospholipid headgroup motions. PI-PLC binds poorly to pure anionic phospholipid vesicles, but 0.1 X PC significantly enhances binding, increases PI-PLC activity, and slows nanosecond rotational/wobbling motions of both phospholipid headgroups, as indicated by increased c . PI-PLC activity and phospholipid c are constant between 0.1 and 0.5 X PC . Above this PC content, PI-PLC has little additional effect on the substrate analogue but further slows the PC c , a motional change that correlates with the onset of reduced enzyme activity. For PC-rich bilayers, these changes, together with the reduced order parameter and enhanced lateral diffusion of the substrate analogue in the presence of PI-PLC, imply that at high X PC , kinetic inhibition of PI-PLC results from intravesicle sequestration of the enzyme from the bulk of the substrate. Both methodologies provide a detailed view of protein-lipid interactions and can be readily adapted for other peripheral membrane proteins.Bacterial phosphatidylinositol-specific phospholipase C (PI-PLC) 2 enzymes aid in organism infectivity (1), whereas the structurally homologous mammalian PLCâŠ1 and related enzymes are required for phosphoinositide metabolism and are important for intracellular signaling (2, 3). These peripheral membrane proteins often have distinct binding modes for substrates and for other lipids that either anchor the protein to the surface or adjust its conformation to enhance catalysis (4). However, using traditional methods, it has been difficult to determine how lipid composition affects phospholipase binding and, conversely, how protein binding alters the lipid environment, particularly in multicomponent vesicles. Current methods for monitoring peripheral membrane protein binding to mixed component lipid vesicles, including centrifugation, gel filtration, and NMR, can provide information on bulk protein partitioning but do not usually provide insight into how the properties of the individual phospholipids change when protein is bound. Most of these methods also require protein concentrations well above the amounts used in enzyme kinetics. Therefore, even when binding to multicomponent vesicles can be measured, it has been difficult to separate how substrates (or substrate analogues)...