The interaction between deuterated dipalmitoylphosphatidylcholine (DPPC-d62) and palmitic acid (PA) in mixed Langmuir monolayers is studied using vibrational sum frequency generation (VSFG) spectroscopy. Palmitic acid is an additive in exogenous lung surfactant preparations such as Survanta and Surfaxin. The effect of PA on the chain conformation and orientation of DPPC in the liquid-expanded and condensed phases is explored. A condensing effect of PA on DPPC is observed with VSFG. At 12 mN/m, DPPC-d62 alone is in the liquid-expanded phase. Adding PA increases the conformational ordering of DPPC chains and causes DPPC to transition from the expanded phase into the condensed phase. At 42 mN/m, DPPC-d62 and PA form a mixed structure in the condensed phase. The presence of PA decreases the chain tilt angle of DPPC, increasing the orientational ordering of DPPC chains. At 42 mN/m, there is also evidence from the frequency red shift of the PO2- symmetric stretch that the carboxyl group of PA forms a hydrogen bond with the phosphate group of DPPC in the condensed phase. From this work the effect of PA on DPPC is 2-fold: (1) PA increases the chain ordering of DPPC and promotes the LE and TC phase separation and (2) due to the miscibility between DPPC and PA in the condensed phase, PA decreases the collapse pressure.