Radioisotope-labelled phosphatidylethanolamine can be converted to radioactive diacylglycerol in the presence of added unlabelled diacylglycerol. With [14C-glycerol; 3H-acyl]phosphatidylethanolamine as substrate, the conversion to double-labelled diacylglycerol occurred without change in isotope ratio indicating that the whole diacylglycerol moiety of phosphatidylethanolamine was directly involved. With [3H-acyl; 32P]phosphatidylethanolamine, formation of [3H]diacylglycerol occurred without production of labelled water-soluble products and consequently no phospholipase C activity could be detected. Under similar conditions, a conversion of [14C-acyl]- or [3H-acyl]-diacylglycerol to labelled phosphatidylethanolamine could also be shown even in the presence of hydroxylamine. [14C-Glycerol; 3H-acyl] diacylglycerol was converted to double-labelled product without change in isotope ratio which again indicated a direct incorporation of the entire diacylglycerol molecule into phosphatidylethanolamine. Both types of conversions were dependent upon time, enzyme concentration, and substrate concentration, and both displayed a pH optimum of approximately 6 and required no added cofactors. In the presence of increasing concentrations of [14C-acyl]diacylglycerol, added to incubation medium containing [3H-acyl]phosphatidylethanolamine, equal amounts of [14C]phosphatidylethanolamine and [3H]diacylglycerol were formed which matched the decrease in [3H]phosphatidylethanolamine. From these results, we conclude that Escherichia coli has an enzyme that catalyses the exchange between the diacylglycerol moiety of phosphatidylethanolamine and free diacylglycerol, with complete sparing of the phosphoethanolamine moiety.Key words: diacylglycerol, phosphatidylethanolamine, exchange, Escherichia coli.