Methyl-beta-cyclodextrin (M beta CD) can be used to exchange membrane lipids between different vesicles in order to prepare model membrane vesicles with lipid asymmetry. To help define what factors influence lipid exchange, we studied how lipid interaction with cyclodextrins (CDs) was affected by lipid and CD structure. The decrease in light scattering upon CD-induced vesicle solubilization and the change in Forster resonance energy transfer of labeled lipids upon vesicle solubilization and lipid exchange were used to detect phospholipid CD interaction. Of the CDs examined, M beta CD, hydroxypropyl-alpha-cyclodextrin (HP alpha CD), and hydroxypropyl-beta-cyclodextrin (HP beta CD) were the three with the most suitable phospholipid interaction properties. Only M beta CD was observed to dissolve lipid vesicles (at least at CD concentrations below 125 mM). Solubilization of lipid vesicles was half complete at 10-80 mM M beta CD with progressively higher M beta CD concentrations required as phospholipid acyl chain length increased from 14 to 22 carbons. Phospholipid acyl chain unsaturation and lipid headgroup structure also affected the amount of M beta CD needed for solubilization. All three CDs studied were able to carry out phospholipid exchange. M beta CD, which retained the ability to carry out lipid exchange below M beta CD concentrations needed for solubilization, exchanged lipid more efficiently than HP alpha CD or HP beta CD. However, the ability of HP alpha CD to exchange phospholipids, coupled with its inability to interact with cholesterol, indicates that it will be useful for preparing asymmetric vesicles with controlled amounts of cholesterol.