Proteoliposomes containing cytochrome c oxidase and phospholipid have been made by sonication and by the cholate dialysis procedure. In both methods of preparation, only about 50% of the enzyme molecules are oriented in the membrane with their cytochrome c reaction sites exposed to the outside of the vesicle. 2. The activity of cytochrome c oxidase in the reconstituted vesicles in not increased by incubation in 1% Tween 80. Experiments on reconstituted vesicles containing internal (entrapped) cytochrome c indicate that turnover of enzyme oxidising entrapped cytochrome c in the presence of N,N,N',N'-tetramethyl-p-phenylenediamine or 2,3,5,6-tetramethyl-p-phenylendediamine is at a very much lower rate than enzyme oxidising external ferrocytochrome c. 3. Oxidation of ascorbate by externally added cytochrome c results in an electrogenic production of OH- inside the vesicles, which can be monitored using entrapped phenol red. Polylysine inhibits, but does not abolish, the internal alkalinity change in reconstituted vesicles oxidising internal (entrapped) cytochrome c using externably added ascorbate plus N,N,N',N'-tetramethyl-p-phenylenediamine. When 2,3,5,6-tetramethyl-p-phenylenediamine is used as the permeable redox mediator, an increase in internal acidity can be monitored under the same conditions.