Phosphatidylserine (PS) is the most abundant negatively charged phospholipid in eukaryotic membranes. PS directs the binding of proteins that bear C2 or gamma-carboxyglutamic domains and contributes to the electrostatic association of polycationic ligands with cellular membranes. Rather than being evenly distributed, PS is found preferentially in the inner leaflet of the plasma membrane and in endocytic membranes. The loss of PS asymmetry is an early indicator of apoptosis and serves as a signal to initiate blood clotting. This review discusses the determinants and functional implications of the subcellular distribution and membrane topology of PS.