Lipid monolayer techniques were used to show that lipolytic products formed by the action of lipoprotein lipase on triacylglycerol immediately locate and spread throughout the gas-water interface, displacing substances with lower spreading pressures. Addition of albumin to the aqueous subphase accelerated transfer of fatty acids and monoacylglycerol from the interface and thereby enhanced lipolysis. When albumin was not contiguous with the site of hydrolysis, lipolytic products readily moved in the interface to the area of contact with albumin where they were transferred from the interface. These findings provide physical-chemical evidence for transport of lipid by lateral movement in cell membranes. A similar mechanism is proposed for transport of insulin from blood to fat cells in adipose tissue. We suggest that insulin receptors transfer from fat cells to the luminal surface of capillary endothelium by lateral movement in a continuous plane of cell membranes, and that insulin-receptor complexes formed at the luminal surface transfer by the same mechanism to fat cells where the hormone can act.