In aqueous solution, while cytochrome c is a stably folded protein with a tightly packed structure at the secondary and tertiary levels, its heme-free precursor, apocytochrome c, shows all features of a structureless random coil. However, upon interaction with phospholipid vesicles or lysophospholipid micelles, apocytochrome c undergoes a conformational transition from its random coil in solution to an alpha-helical structure on association with lipid. The driving forces of this lipid-induced folding process of apocytochrome c were investigated for the interaction with various phospholipids and lysophospholipids. Binding of apocytochrome c to negatively charged phospholipid vesicles induced a partially folded state with approximately 85% of the alpha-helical structure of cytochrome c in solution. In contrast, in the presence of zwitterionic phospholipid vesicles, apocytochrome c remains a random coil, suggesting that negatively charged phospholipid headgroups play an important role in the mechanism of lipid-induced folding of apocytochrome c. However, negatively charged lysophospholipid micelles induce a higher content of alpha-helical structure than equivalent negatively charged diacylphospholipids in bilayers, reaching 100% of the alpha-helix content of cytochrome c in solution. Furthermore, micelles of lysolipids with the same zwitterionic headgroup of phospholipid bilayer vesicles induce approximately 60% of the alpha-helix content of cytochrome c in solution. On the basis of these results, we propose a mechanism for the folding of apocytochrome c induced by the interaction with lipid, which accounts for both electrostatic and hydrophobic contributions. Electrostatic lipid-protein interactions appear to direct the polypeptide to the micelle or vesicle surface and to induce an early partially folded state on the membrane surface. Hydrophobic interactions between nonpolar residues in the protein and the hydrophobic core of the lipid bilayer stabilize and extend the secondary structure upon membrane insertion.