HPD-A, the putative active biologic component of HPD, photosensitized lysis of large phosphatidylcholine liposomes and lipid peroxidation in small liposomes with oxygen enhancement ratios from 4 to 5. Unambiguous proof was obtained that this damage was mediated by singlet oxygen. Spectral data indicates that HPD-A localizes in a heterogeneous environment in the large liposomes and within the membrane bilayer of the small liposomes. The latter was accompanied by a shift of the Soret band from 364 nm to 398 nm and a 2-3 fold increase of the fluorescence. The presence of human serum albumin protected the large liposomes from photosensitized damage by HPD-A and inhibited the diffusion of HPD-A into the small liposomes. In connection with photoradiation therapy, these findings suggest that aggregated HPD-A and the more fluorescent, disaggregated HPD-A may act as photodynamic sensitizers after localization, and that binding of HPD-A to serum protein protects the aggregated form and inhibits photodynamic damage to membranes. However, protein photooxidation is feasible in the protein-bound state.