Cyclodextrins are able to bind hydrophobic molecules in their interior cavity and as such have received a great deal of attention as carriers of cholesterol, lipophilic drugs, and other sparingly soluble compounds. Despite the importance of these biochemical applications, relatively little is known about the interactions of cyclodextrins with phospholipid membranes. Here we characterize the binding of randomly methylated beta-cyclodextrin (m beta CD) to 1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC) using right-angle light scattering and isothermal titration calorimetry. Existing models of lipophile-membrane interactions are inadequate to describe the observed binding; we introduce a modified chemical reaction model in which the chemical activity of the phospholipid is independent of its concentration. We find that an average of four m beta CD molecules bind to each POPC molecule with an enthalpy of reaction of 46 kJ mol(-1) and an equilibrium constant of 90 M(-3). These results are consistent with earlier qualitative observations and suggest that disruption of phospholipid membranes may be minimized if the concentration of m beta CD is kept below about 15 mM.