Glutamate is believed to be the major excitatory transmitter in the mammalian central nervous system. Keeping the extracellular concentration of glutamate low, the glutamate transporters are required for normal brain function. Arachidonic acid (AA) inhibits glutamate uptake in relatively intact preparations (cells, tissue slices, and synaptosomes (Rhoads, D.E., Ockner, R. K., Peterson, N. A., and Raghupathy, E. (1983) Biochemistry 22, 1965-1970 and Volterra, A., Trotti, D., Cassutti, P., Tromba, C., Salvaggio, A., Melcangi, R. C., and Racagni, G. (1992b) J. Neurochem. 59, 600-606). The present study demonstrates that the effect of AA occurs also in a reconstituted system, consisting of a purified glutamate transporter protein incorporated into artificial cell membranes (liposomes). The characteristics of the AA effect in this system and in intact cells are similar with regard to specificity, sensitivity, time course, changes in Vmax, and affinity. AA-ethyl ester is inactive, suggesting that the free carboxylic group is required for inhibitory activity. When incubated with proteoliposomes, AA (300 microM, 15 min) mostly partitions to the lipid phase (lipid/water about 95:5). However, uptake inhibition is abolished by rapid dilution (6.5-fold) of the incubation medium (water phase), a procedure that does not modify the amount of AA associated with lipids. On the contrary, inhibition remains sustained if the same dilution volume contains as little as 5 microM AA, a concentration inactive before saturation of liposome lipids with 300 microM AA. The same degree of inhibition (60%) is obtained by 5 microM AA following preincubation with the inactive AA-ethyl ester (300 microM) instead of AA. The lipids apparently inactivate AA by extracting it from the water phase. The results suggest that AA acts on the transporter from the water phase rather than via the membrane. This could be true for other proteins as well since gamma-aminobutyric acid uptake is similarly affected by AA.