Several kinds of hydrophilic proteins were examined to determine their interaction with artificial liposomes. Mitochondrial aspartate aminotransferase (m-GOT) [EC 2. 6. 1. 1], as well as cytochrome c, was found to interact strongly with negatively charged liposomes. In each case, an appreciable amount of the protein bound to liposomes remained unreleased after raising the salt concentration in the medium. The m-GOT tightly bound to the liposomes was also found to become latent in its enzymatic activity, and could be reversibly activated by solubilization of the liposomes with detergent. This is also the case for cytochrome c, which ceases to be reducible by external reductant, such as dithionite. Furthermore, the tightly bound m-GOT was not susceptible to the proteolytic action of trypsin, or that of Nagarse. From these observations it can be inferred that these basic proteins interact with acidic liposomes not only electrostatically but also hydrophobically. This kind of hydrophobic interaction was not observed in the combination of positively charged liposomes and acidic proteins, including s-GOT. Mitochondrial GOT was shown to be bound to isolated intact mito-chondria, but the bound enzyme was fully active, in contrast to the case of acidic liposomes. The hydrophobic interaction of water-soluble protein with liposomes is discussed in connection with the penetration of matrix enzyme through mitochondrial membranes.