We examined the ability of a series of highly lipophilic phorbol esters to inhibit [20-3H]phorbol 12,13-dibutyrate binding to the cytosolic aporeceptor from mouse brain. If added in the usual fashion directly into the aqueous phase of the assay mixture, phorbol 12,13-distearate, phorbol 12,13-dioleate, and phorbol 12,13-dimyristate showed very weak inhibitory activities, with apparent inhibitor equilibrium dissociation constant values above 4 microM. In contrast, if incorporated directly into the liposomes used to reconstitute the aporeceptor, all three derivatives inhibited binding with high apparent affinities, 7.4 to 34 nM. The less lipophilic derivative phorbol 12,13-didecanoate showed a similar high affinity, 2.4 to 3.2 nM, by either route of addition. Consistent with the activity of the lipophilic derivatives being masked by an inability to transfer from the aqueous to the lipid phase, phorbol 12,13-distearate added to the aqueous phase inhibited efficiently (apparent inhibitor equilibrium dissociation constant, 14 nM) in the presence of 0.03% Triton X-100. The results suggest that the phorbol ester receptor recognizes phorbol esters which are inserted into the lipid bilayer. They indicate, moreover, that the apparent low activity of the more lipophilic phorbol esters is strongly influenced by factors other than equilibrium binding affinities.