The molecular mechanism controlling the variable activity of the malignancy marker adenosine deaminase (ADA) is enigmatic. ADA activity was found to be modulated by the membrane-bound adenosine deaminase complexing protein (CP=DPPIV=CD26). The role of lipid-protein interactions in this modulation was sought. While direct solubilization of ADA in vesicles resulted in loss of ADA activity, the binding of ADA to CP reconstituted in vesicles restored the specific activity. The activity of ADA, free or bound to CP in solution, resulted in continuous linear Arrhenius plots. However, ADA bound to reconstituted CP exhibited two breaks associated with approximately 30% increased activity, at 25 and 13 degrees C, yielding three lines with similar apparent activation energies (E(a)). Continuum solvent model calculations of the free energy of transfer of the transmembrane helix of CP from the aqueous phase into membranes of various widths show that the most favorable orientations of the helix above and below the main phase transition may be different. We suggest that the 20% change in the thickness of the bilayer below and above the main phase transition may modify the orientation of CP in the membrane, thereby affecting substrate accessibility of ADA. This could account for ADA's reduced activity associated with increased membrane fluidity in transformed vs. normal fibroblasts.