We have evaluated the effect of the perfluorinated fatty acids pentadecafluoro‐n‐octanoic acid (PFOA) and nonadecafluoro‐n‐decanoic acid (NDFDA) on the ability of a human B‐lymphoblastoid cell line to bind the lipid‐binding, membrane‐impermeant, fluorescent dye merocyanine 540 (MC540). Subtoxic concentrations of perfluorinated fatty acids (0.9 mM PFOA; 0.5 mM NDFDA) greatly diminish binding of MC540 by normal plasma membranes, as determined by fluorescence flow cytometry. When perfluorinated fatty acids are added to cells at toxic or lethal concentrations (1.2 mM PFOA; 0.75 mM NDFDA), MC540 binding increases dramatically, with entrance of dye to internal membrane domains. Neither perfluorinated fatty acid molecule reduces the ability of surface immunoglobulin to migrate laterally and cap on cells. Our data suggest that perfluorinated fatty acids either interact directly with lipid binding sites for MC540, and thereby inhibit dye intercalation, or alter membrane lipid architecture and lipid packing to diminish MC540 binding. Both possibilities support a direct, physical, membrane‐altering mechanism for perfluorinated fatty acid toxicity on mammalian cells.