Rat liver microsomes were treated with phospholipase D to obtain microsomal membranes with varying amounts of membrane-bound phosphatidate. This treatment did not impair the activity of two microsomal-bound enzymes acting with phosphatidate as substrate, i.e. CTP: phosphatidate cytidylyltransferase and phosphatidate phosphohydrolase. The dependency of the activity of these enzymes on the concentration of membrane-bound phosphatidate was determined. Both enzymes showed a linear increase in activity with membrane-bound phosphatidate concentrations up to at least 100 nmol phosphatidate/mg microsomal protein. These results indicate that both enzymes have a large reserve capacity and suggest that the enzymes are operating intracellularly, i.e. at phosphatidate concentrations of 5-10 nmol/mg endoplasmic reticulum protein, far below their maximal capacity. The ratio of phosphatidate conversion into CDP-diglyceride and 1,2-diglyceride seems to be constant for a large range of membrane-bound phosphatidate concentrations. The membrane-bound enzymes cannot utilize phosphatidate substrate present in heat-denatured membranes, but are active on phosphatidate incorporated into membranes of phospholipid vesicles.