Ethanolaminephosphotransferase (EC 2.7.8.1) activity was determined in lung microsomes using diacylglycerols generated endogenously from [14C]glycerol 3-phosphate and different mixtures of fatty acids. Ethanolaminephosphotransferase used endogenously generated dipalmitoylglycerol better than dioleoylglycerol. The apparent Km and the reaction rates for four different endogenously generated mixtures were the same (16 nmol/mg microsomal proteins). The apparent Km values for CDP-ethanolamine were the same (0.26 mm) for endogenously generated dipalmitoylglycerol and dioleoylglycerol. The amount of diacylglycerol generated in microsomes was 2-3-times the apparent Km for diacylglycerol. Dipalmitoylglycerol, supplied exogenously as a Tween 20/phosphatidylglycerol emulsion, was nearly twice as active as dioleoylglycerol. Both dipalmitoylglycerol and dioleoylglycerol were more active as substrates when emulsions were made with phosphatidylglycerol/Tween 20 than with Tween 20 alone. The results suggest that ethanolaminephosphotransferase in lung is relatively nonselective for molecular species of diacylglycerol. In addition, the results suggest that the concentration of diacylglycerol and the physical state in which it is presented to the enzyme can affect the apparent selectivity of ethanolaminephosphotransferase for diacylglycerols.