A conventional fluorescence microscope was modified to observe the sites of resonance energy transfer (RET) between fluorescent probes in model membranes and in living cells. These modifications, and the parameters necessary to observe RET between membrane-bound fluorochromes, are detailed for a system that uses N-4-nitrobenzo-2-oxa- 1,3-diazole (NBD) or fluorescein as the energy donor and sulforhodamine as the energy acceptor. The necessary parameters for RET in this system were first optimized using liposomes. Both quenching of the energy donor and sensitized fluorescence of the energy acceptor could be directly observed in the microscope. RET microscopy was then used in cultured fibroblasts to identify those intracellular organelles labeled by the lipid probe, N-SRh-decylamine (N-SRh-C10). This was done by observing the sites of RET in cells doubly labeled with N-SRh-C10 and an NBD-labeled lipid previously shown to label the endoplasmic reticulum, mitochondria, and nuclear envelope. RET microscopy was also used in cells treated with fluorescein-labeled Lens culinaris agglutinin and a sulforhodamine derivative of phosphatidylcholine to examine the internalization of plasma membrane lipid and protein probes. After internalization, the fluorescent lectin resided in most, but not all of the intracellular compartments labeled by the fluorescent lipid, suggesting sorting of the membrane-bound lectin into a subset of internal compartments. We conclude that RET microscopy can co-localize different membrane-bound components at high resolution, and may be particularly useful in examining temporal and spatial changes in the distribution of fluorescent molecules in membranes of the living cell.