During the steady state reaction progress in the scooting mode with highly processive turnover, Bacillus cereus sphingomyelinase (SMase) remains tightly bound to sphingomyelin (SM) vesicles (Yu et al., Biochim. Biophys. Acta 1583, 121-131, 2002). In this paper, we analyze the kinetics of SMase-catalyzed hydrolysis of SM dispersed in diheptanoylphosphatidyl-choline (DC7PC) micelles. Results show that the resulting decrease in the turnover processivity induces the stationary phase in the reaction progress. The exchange of the bound enzyme (E*) between the vesicle during such reaction progress is mediated via the premicellar complexes (E(i)#) of SMase with DC7PC. Biophysical studies indicate that in E(i)# monodisperse DC7PC is bound to the interface binding surface (i-face) of SMase that is also involved in its binding to micelles or vesicles. In the presence of magnesium, required for the catalytic turnover, three different complexes of SMase with monodisperse DC7PC (E(i)# with i=1, 2, 3) are sequentially formed with Hill coefficients of 3, 4 and 8, respectively. As a result, during the stationary phase reaction progress, the initial rate is linear for an extended period and all the substrate in the reaction mixture is hydrolyzed at the end of the reaction progress. At low mole fraction (X) of total added SM, exchange is rapid and the processive turnover is limited by the steps of the interfacial turnover cycle without becoming microscopically limited by local substrate depletion or enzyme exchange. At high X, less DC7PC will be monodisperse, E(i)# does not form and the turnover becomes limited by slow enzyme exchange. Transferred NOESY enhancement results show that monomeric DC7PC in solution is in a rapid exchange with that bound to E(i)# at a rate comparable to that in micelles. Significance of the exchange and equilibrium properties of the E(i)# complexes for the interpretation of the stationary phase reaction progress is discussed.