Vesicle-micelle transition structures of egg phosphatidylcholine (PC) and octyl glucoside (OG) mixtures were observed in the vitrified hydrated state by cryo-transmission electron microscopy (cryo-TEM) and correlated with the macroscopic and molecular changes previously associated with micellization monitored by 90 degrees light scattering and resonance energy transfer between fluorescent lipid probes. Several distinct structural changes occurred as OG was added to the PC vesicles. First, the average vesicle size decreased from 160 nm to less than 66 nm with no apparent change or decrease in optical density (OD). Then, associated with a small rise in OD, samples with open vesicles were observed coexisting with pieces of lamellae and long cylindrical micelles; more micelles were seen at higher [OG]. This mixture of vesicles and cylindrical micelles occurred in the region of the phase diagram previously attributed to vesicle opening, and possibly vesicle size increase. At higher [OG], small spheroidal micelles coexisting with cylindrical micelles correlated with a decrease in OD and changes in the fluorescence signal. At high [OG] when the solution appeared clear, spheroidal micelles were the dominant structure. By using cryo-TEM, a technique which preserves the original microstructure of fluid systems and provides direct images at 1 nm resolution, we have elucidated the vesicle-micelle transition and identified intermediates not known previously in the PC/OG system.