Lipid chain length modulates the activity of transmembrane proteins by mismatch between the hydrophobic span of the protein and that of the lipid membrane. Relative binding affinities of lipids with different chain lengths are used to estimate the excess free energy of lipid-protein interaction that arises from hydrophobic mismatch. For a wide range of integral proteins and peptides, the energy cost is much less than the elastic penalty of fully stretching or compressing the lipid chains to achieve complete hydrophobic matching. The chain length dependences of the free energies of lipid association are described by a model that combines elastic chain extension with a free energy term that depends linearly on the extent of residual mismatch. The excess free energy densities involved lie in the region of 0.5-2.0 k(B)T x nm(-2). Values of this size could arise from exposure of hydrophobic groups to polar portions of the lipid or protein, but not directly to water, or alternatively from changes in tilt of the transmembrane helices that are energetically comparable to those activating mechanosensitive channels. The influence of hydrophobic mismatch on dimerization of transmembrane helices and their transfer between lipid vesicles, and on shifts in chain-melting transitions of lipid bilayers by incorporated proteins, is analyzed by using the same thermodynamic model. Segmental order parameters confirm that elastic lipid chain distortions are insufficient to compensate fully for the mismatch, but the dependence on chain length with tryptophan-anchored peptides requires that the free energy density of hydrophobic mismatch should increase with increasing extent of mismatch.