The kinetics of palmitoyl-CoA hydrolase were influenced by both the availability of the substrate and formation of micelles. At palmitoyl-CoA concentrations below the critical micelle concentration, addition of non-ionic detergent increased the activity until the critical micelle concentration of the mixed micelles was reached. At palmitoyl-CoA concentrations above the critical micelle concentration, inhibitor of the activity was observed, but addition of detergents of the Triton X series reversed the inhibition. Maximum palmitoyl-CoA hydrolase activity was found when the ratios (w/v) of palmitoyl-CoA: Triton X-100 and palmitoyl-CoA: Triton X-405 were approximately 0.35 and 0.05, respectively. At these above the mixed critical micelle concentration. The results indicate that monomer palmitoyl-CoA is the substrate and that monomer forms of the non-ionic detergents of the Triton X series activate the enzyme. Isolated microsomal lipids activated the microsomal palmitoyl-CoA hydrolase, suggesting that a hydrophobic environment is advantageous for interaction between enzyme and substrate in vivo. The maximum activity in the presence of mixed micelles is discussed in relation to a model where mixed micelles are regarded as artificial membranes to which the enzyme may adhere in an equilibrium with the monomer substrate and detergent in the monomer form. It is suggested that intracellular membranes may resemble mixed micelles in equilibrium with detergent-active substrates such as palmitoyl-CoA.