The permeation of water through liposomal membranes composed of various saturated phosphatidylcholine plus gramicidin A was studied as a function of temperature. 1. The presence of gramicidin in the liposomal bilayers caused an increase in water permeability. Below the phase transition temperature this effect could be measured quite clearly in all the systems we tested, but the extent of the increase was largely dependent on the length of the hydrocarbon chains. 2. Increasing amounts of gramicidin caused a gradual disappearance of the abrupt change in the rate of water permeation near the gel-liquid crystalline phase transition temperature of dipalmitoyl phosphatidylcholine liposomes. Differential scanning calorimetry analysis of the system containing these relatively small amounts of gramicidin still showed a clear transition from the liquid crystalline to the gel state with only a slight reduction in the enthalpy change. 3. In liposomes composed of dimyristoyl, dipalmitoyl and saturated egg phosphatidylcholine there was a concomitant decrease in the activation energy of water permeation in the presence of gramicidin below and above the phase transition temperature. The activation energy for water permeation through longer chained distearoyl phosphatidylcholine liposomal bilayers was the same with or without gramicidin in the bilayer. 4. It is concluded that the ability of gramicidin to form conducting channels in a gel state bilayer depends on the thickness of the paraffin core.