The incorporation of serine and ethanolamine into phospholipids in rabbit retinal subcellular fractions and in excised retinas was studied in vitro, and some enzymic properties of the incorporation of phospholipid bases by base exchange were examined in the microsomal fraction. The retina was found to have a higher rate of base exchange for the incorporation of phospholipid bases than other tissues. The retinal microsomal fraction possessed the highest specific activity of base exchange, while the rod outer segment had very little activity. These results suggest that the phospholipids in the rod outer segment may be transferred from the inner segment of the photorecepter cell. The apparent Km values for serine and ethanolamine in the microsomal fraction decreased with decreasing Ca2+ concentration. Although no further increase of incorporation of serine and ethanolamine occurred after 40 min in the microsomal fraction, continuous incorporation of both bases into phospholipids was seen for 3 hr in excised retina. Illumination did not significantly affect the incorporation of serine and ethanolamine in excised retina or in the rod outer segment fraction. Base exchange reaction thus may not play a direct role in the visual process.