Propagation of a signal transduction event usually involves protein-protein interactions, (e.g. protein phosphorylation and substrate-enzyme reactions). Such events are highly enhanced in magnitude and specificity if the proteins involved are associated with and concentrated in the same membrane domain, rather than distributed over a large number of disconnected domains. We believe that membrane lipid domains can impart a magnifying or quenching effect on membrane-associated cascading reactions. For this contention to be valid, regulation of domains is necessary to prevent random cascade reactions by the mere presence of domains. Fluid lipid domains are dynamic structures. In these domains, differences in interaction energies between different lipid species are quite small, on the order of only a few hundred of calories per mole. The large number of lipids present in membranes magnifies such lipid-lipid interactions, leading to domain formation. In contrast, protein-lipid interactions are usually on the order of kcal/mol of protein and vary with lipid composition. Differential protein-lipid interactions that vary with lipid composition may then enhance formation or disintegration of domains.