The contributions of electrostatic and hydrophobic interactions in the activation of cytidylyl-transferase (CT) by various negatively charged lipids were analyzed using small unilamellar or multilamellar vesicles (SUVs or MLVs). The activation of CT by SUVs containing increasing mole percentages of anionic phospholipids varied in proportion to the net charge associated with the polar head group, suggesting an electrostatic component to the activation. However, increasing ionic strength to neutralize the surface charge enhanced the potency of SUVs containing PA or PG, suggesting that the hydrophobic effect is a stronger force than electrostatics in driving the interaction of CT with SUVs. On the other hand, electrostatics played a more important role in the activation by MLVs. Increasing ionic strength decreased the potency of MLVs containing PG. CT bound to MLVs in the gel state, but was inactive; the enzyme was only active when the MLVs were in the liquid-crystalline state, suggesting an intercalation event. Lowering the pH from 7.4 to 6.2 resulted in a decrease in the negative surface charge required for activation. The binding of CT to PG vesicles was enhanced at acidic pH. The results suggest that at pH 6.2 one or more amino acids on CT that are involved in lipid binding would be protonated. This could enhance the electrostatic effect by increasing the positive charge on CT, or it could enhance the hydrophobic effect by decreasing the negative charge on CT. In addition, maximal activity of CT was decreased at the lower pH, suggesting that active site residues may also be affected. CT was activated by the synergistic interaction of diacylglycerol and anionic phospholipid in SUVs. The synergy between DG and PA at low concentrations suggests the possibility that these second messenger lipids could concertedly regulate CT and thus PC synthesis in response to agonists that stimulate PC hydrolysis via phospholipases C and/or D.