1. Substance P (SP) could be extracted from brain homogenates with chloroform-methanol by a method which extracts all lipids. 2. SP could be transferred form this total lipid extract (TLE) into an aqueous solution at low pH values (2.0--3.0). 3. At higher pH values (5.5) SP could be transferred from an aqueous phase into an organic phase (chloroform:methanol, 2:1) and recombined with TLE (which was previously freed from endogenous SP) contained in this phase. The binding capacity of TLE for SP exceeded by far the amount of endogenous SP bound originally in the brain extracts. 4. Among the lipids present in TLE, phosphatidylserine was able to bind and release SP in a pH dependent manner. 5. It is suggested that SP bound to phosphatidylserine is the storage form of SP in the brain. The mechanisms by which it is released are still unknown. The possibility that the SP-receptor is also a phospholipid is considered.