The effects of fatty acids and phospholipids on the interaction of the full-length GTPase activating protein (GAP) as well as its isolated C-terminal domain and the Ha-ras proto-oncogene product p21 were studied by various methods, viz. GTPase activity measurements, fluorescence titrations and gel permeation chromatography. It is shown that all fatty acids and acidic phospholipids tested, provided the critical micellar concentration and the critical micellar temperature are reached, inhibit the GAP stimulated p21 GTPase activity. This is interpreted to mean that it is not the molecular structure of acidic lipid molecules per se but rather their physical state of aggregation which is responsible for the inhibitory effect of lipids on the GTPase activity. The relative inhibitory potency of various lipids was measured under defined conditions with mixed Triton X-100 micelles to follow the order: unsaturated fatty acids greater than saturated acids approximately phosphatidic acids greater than or equal to phosphatidylinositol phosphates much greater than phosphatidylinositol and phosphatidylserine. GTPase experiments with varying concentrations of p21 and constant concentrations of GAP and lipids indicate that the binding of GAP by the lipid micelles is responsible for the inhibition, a finding which was confirmed by fluorescence titrations and gel filtrations which show that the C-terminal domain of GAP is bound by lipid micelles.