The photophysical behavior of 8-anilino-1-naphthalenesulphonate (ANS) in vesicles of dipalmitoylphosphatidylcholine (DPPC), a pulmonary surfactant, has been carried out in a detailed manner. ANS shows notable variations in fluorescence intensity, lifetime, and anisotropy parameters as it gets into the vesicle. It was found that ANS partitions well into the DPPC bilayer membrane with an estimated partition coefficient of ∼2.0 × 105. Among the various fluorescence parameters of ANS, fluorescence anisotropy was found to be most responsive to the temperature induced phase change of the bilayer membrane. These interesting fluorescence parameters of ANS were then used to study the hydration of lipid bilayer membrane by submicellar concentration of bile salts. From the steady-state fluorescence intensity and dynamic fluorescence lifetime analyses it is clear that ANS is able to probe the submicellar concentration (≤1 mM) of bile salt induced hydration of lipid bilayer membrane that accompanies expulsion of ANS from the bilayer to the aqueous bulk phase. Lower-temperature shift in the phase transition of DPPC bilayer indicates that fluorescence anisotropy of ANS is sensitive enough to the bile salt induced perturbation in the packed acyl chains of DPPC bilayer and modification in the membrane fluidity. In presence of sodium deoxycholate (NaDC) and sodium cholate (NaC) in DPPC vesicles, ANS experiences restriction in rotational mobility which is evident from the variation in steady-state fluorescence anisotropy and fluorescence anisotropy decay parameters. © 2013 American Chemical Society.