This review deals with current concepts on the regulation and function of phospholipid asymmetry in biological membranes. This ubiquitous phenomenon is characterized by a distinctly different lipid composition between the inner and outer leaflet of the membrane bilayer. Transbilayer asymmetry is controlled by different membrane proteins that function as lipid transporters, catalyzing uni- or bi-directional transbilayer movement of lipids. Under normal conditions, an ATP-dependent protein (aminophospholipid translocase) generates and maintains phospholipid asymmetry by promoting unidirectional transport of aminophospholipids from the outer- to the inner leaflet. The membrane lipid asymmetry may be compromised during cellular activation by a Ca2+-dependent transporter (lipid scramblase) that facilitates rapid bi-directional movement of all major phospholipid classes. A major consequence of this collapse of lipid asymmetry is the exposure of phosphatidylserine (PS) at the outer membrane surface. Surface exposure of PS has important physiological and pathological implications for blood coagulation, apoptosis, and cell-cell recognition.