Under hypoglycemic conditions, concomitant hyperinsulinism causes an apparent modification of hemoglobin (Hb) which is manifested by its aggregation (Niketic et al., Clin. Chim. Acta 197 (1991) 47). In the present work the causes and mechanisms underlying this Hb modification were studied. Hemoglobin isolated from normal erythrocytes incubated with insulin was analyzed by applying 31P-spectrometry and lipid extraction and analysis. To study the dynamics of the plasma membrane during hyperinsulinism, a fluorescent lipid-analog was applied. In the presence of insulin phosphatidylserine (PS), phosphatidylethanolamine (PE) and cholesterol were found to bind to Hb. Lipid binding resulted in Hb aggregation, a condition that can be reproduced when phospholipids are incubated with Hb in vitro. Using a fluorescent lipid-analog, it was also shown that exposing erythrocytes to supraphysiological concentrations of insulin in vitro resulted in the internalization of lipids. The results presented in this work may have relevance to cases of diabetes mellitus and hypoglycemia.