The interaction of ethanol with phospholipids was studied in bicelles at a physiologically relevant ethanol concentration of 20 mM and a lipid content of 14 wt % by high-resolution NMR. Transient association of ethanol with magnetically aligned bicelles imparts a small degree of anisotropy to the solute. This anisotropy allows detection of residual (1)H-(1)H and (1)H-(13)C dipolar couplings, which are superimposed on scalar couplings. Residual (2)H NMR quadrupole splittings of isotope-labeled ethanol were measured as well. The analysis of residual tensorial interactions yielded information on the orientation and motions of ethanol in the membrane-bound state. The fraction of phosphatidylcholine-bound ethanol was determined independently by gas chromatography and NMR. About 4% of ethanol is bound to phosphatidylcholine at a bicelle concentration of 14 wt % at 40 degrees C. Free and bound ethanol are in rapid exchange. The lifetime of ethanol association with phosphatidylcholine membranes is of the order of a few nanoseconds.