Lipid insertion of cholera toxin after binding to GM1-containing liposomes. The technique of hydrophobic photolabeling with photoreactive lipids was used to study the topology of interaction of cholera toxin with liposomes containing galactosyl-N-acetylgalactosaminyl-[N-acetyl neuraminyl]-galactosyl glucosyl ceramide (GM1). The toxin appears to locate itself superficially on the lipid bilayer. The interaction is mediated only by the gamma beta 5 part. On reduction of the disulfide bridge joining the alpha and gamma subunits, the alpha subunit penetrates deeply into the lipid bilayer. The mere binding of cholera toxin to GM1 is not sufficient to allow the insertion of the enzymatically active alpha subunit in the membrane. Some processing, which may involve a modification of covalent bonds of the toxin molecule (such as that caused by reduction) appears to be necessary. The specific reduction of the alpha-gamma disulfide bond on the external surface of the membrane as a prerequisite for the membrane penetration of the alpha subunit is discussed.