The canonical mechanism of gramicidin (gA) channel formation is transmembrane dimerization of nonconducting subunits that reside in opposite bilayer leaflets. The channels do not open and close; they appear and disappear due to subunit association and dissociation. Many different types of experiments support this monomer ↔ dimer mechanism. Recently, however, this mechanism was challenged, based on experiments with lipid vesicle-incorporated gA under conditions where vesicle fusion could be controlled. In these experiments, sustained channel activity was observed long after fusion had been terminated, which led to the proposal that gA single-channel current transitions result from closed-open transitions in long-lived bilayer-spanning dimers. This proposal is at odds with 40 years of experiments, but involves the key assumption that gA monomers do not exchange between bilayers. We tested the possibility of peptide exchange between bilayers using three different types of experiments. First, we demonstrated the exchange of gA between 1,2-dierucoyl-sn-glycero-3-phosphocholine (DCPC) or 1,2-dioleoyl-sn-glycero-3-phosphocholine (DCPC) lipid vesicles using a fluorescence assay for gA channel activity. Second, we added gA-free DCPC vesicles to both sides of planar DCPC bilayers preincubated with gA, which reduced channel activity up to 10-fold. Third, we added gA-containing DCPC vesicles to one or both sides of DCPC planar bilayers, which produced much higher channel activity when the gA-containing vesicles were added to both sides of the bilayer, as compared to one side only. All three types of experiments show that gA subunits can exchange between lipid bilayers. The exchange of subunits between bilayers thus is firmly established, which becomes a crucial consideration with respect to the mechanism of channel formation.