Liquid monolayers of insoluble surfactants at the air/water interface are treated as a two-dimensional solution made up of molecules with disordered chains and clusters of molecules with ordered chains. The Flory-Huggins equation is used to calculate the activities of the species. On this basis, the phase transition from the Liquid expanded to the liquid condensed state is predicted. Depending on the value of the interaction parameter between disordered and ordered molecules and the extent of clustering, the theoretical pi-A isotherms exhibit either a first-order phase transition or a nonhorizontal, second-order, phase transition. For the tetradecanoic, pentadecanoic, hexadecanoic, and heptadecanoic fatty acids, the theoretical pi-A isotherms are in agreement with experimental data. It should be emphasized that the theory is predictive since all the parameters are calculated on the basis of the molecular structure.