Cytosolic binding proteins are ubiquitous, yet their functions have been poorly defined. Research in multiple labs has now clarified two major transport functions for fatty acid binding proteins (FABPs), one of the most commonly studied examples of this diverse class. Most cellular fatty acids are bound to membranes. Because fatty acids are almost insoluble in water, their movement across the water between cellular membranes is very slow without FABP. FABP increases this rate by increasing the solubility of fatty acids in water. Many forms of FABP can also increase this rate by catalyzing release of the fatty acids from membranes. The first function is most valuable over longer distances (e.g., >1 microm in rat liver cells), while the second is most valuable for shorter distances. Thus, FABPs serve complementary intracellular transport functions. These conclusions may apply to other cytosolic proteins that bind poorly-soluble molecules.