Electron paramagnetic resonance employing a lipid-specific spin label has been used to investigate the molecular effects of endotoxin on the physical state of bilayer lipids in rat erythrocyte membranes. When added at a concentration as low as 40 micrograms/ml to whole blood (plasma plus leukocytes present), decreased membrane lipid motion was found in subsequently washed and spin-labeled intact erythrocytes (P < 0.02). However, if endotoxin were added to washed, plasma plus leukocyte-free intact erythrocytes, no change in the motion of the spin label was found, suggesting that plasma-soluble substances and/or leukocytes are required to produce the change in the physical state of lipids. The decreased lipid motion found in these studies is discussed with reference to the known decreased deformability of endotoxin-treated red cells and to the pathogenesis of sepsis.