Local anesthetics (LA) have been found to interact with phospholipids and lipids extracted from nerve and muscle. This reaction is demonstrated by: (a) Inhibition by LA of phospholipid (and tissue lipid) facilitated transport of calcium from a methanol: water phase into chloroform. This action is dependent upon the cationic form of the LA. (b) LA increase the electrical resistance of "membranes" prepared by impregnating Millipore filters with cephalin:cholesterol or tissue lipid extracts and bathed with NaCl or KCl solutions. (c) LA coagulate aqueous dispersions of cephalin, phosphatidyl serine, phosphatidyl ethanolamine, and inositide, an action shared by calcium. The order of potency in coagulating cephalin sols is tetracaine > calcium > butacaine > procaine. Na(+) and K(+) do not coagulate phospholipid dispersions at 0.1 M concentration and antagonize the effect of Ca(2+). (d) LA produce a marked fall in the pH of cephalin sols equivalent to that produced by calcium, (e) Ca(2+) and LA form 1:2 molar complexes with phospholipids probably by ion-ion and ion-induced polar type of binding at the phosphate groups of the lipid. It is suggested that such reactions with cell membrane phospholipids may underlie inhibitory effects of LA on cellular ion fluxes and provide a chemical basis for anesthetic action.