Radioactive N-acylethanolamine phospholipids were produced in dog heart homogenates incubated with acyl-labeled phosphatidylcholine in the presence of 5 mM Ca2+ and Triton X-100. 70-80% of the label in the N-acylethanolamine phospholipids was recovered in the N-acyl groups and most of the remainder was in the 1-O-acyl groups. Incubations with 1,2-dipalmitoylPC and 1-palmitoyl-2-linoleoylPC labeled in either the 1-O-acyl or 2-O-acyl moiety showed the predominant utilization of the acyl groups at the sn-1 position, indicating transacylation by phospholipase A1 (or lysophospholipase) activity. It is suggested that intramolecular transacylation from 1-O-acyl to N-acyl groups of phosphatidylethanolamine also occurred to some extent, thus providing a free primary hydroxy group as an additional acyl acceptor for the transacylation reaction.