The partitioning efficiency of neutral and anionic prototropic forms of 1-hydroxypyrene in liposome suspensions has been studied. The high partition coefficient value of 1-hydroxypyrene indicates an easy incorporation of the molecule into the lipid bilayer. Detailed pH studies indicate that only the neutral form of 1-hydroxypyrene partitions into the membrane and appreciable spectral changes are observed in the pH range of 9.0-11.5 in Tris-NaOH buffer. However, at pH 11 the spectral changes are maximum. The possibility of using 1-hydroxypyrene as a fluorescent molecular probe for lipid bilayer membranes in alkaline media has been examined, by employing fluorescence intensity and fluorescence anisotropy as probe parameters. The neutral form fluorescence intensity as well as fluorescence anisotropy is sensitive to the changes in the membrane properties and is capable of sensing the phase-transition. This is also capable of monitoring the changes in the membrane due to incorporation of cholesterol and the ethanol-induced interdigitation. The time resolved fluorescence data and the quenching experiments show that 1-hydroxypyrene occupies the water inaccessible interior of the liposome. The high anisotropy value of 1-hydroxypyrene in liposome suggests that it resides in a considerably rigid environment and is very sensitive to the temperature-induced changes in the liposome. © The Royal Society of Chemistry and Owner Societies 2006.