The thermodynamics of small systems, together with simple molecular packing and energetic considerations, previously applied to self-assembling surfactant aggregates in bulk solutions, is here extended to two-dimensional aggregates such as "surface micelles" or domains in monolayers. A new pressure-area (pi-A) isotherm-the "surface micelle isotherm"-is derived that displays features typically exhibited by many surfactant monolayers on the water-air surface. This equation clarifies the nature of continuous-phase transitions in monolayers and allows for the determination of various 2D micellar properties, including aggregation numbers, from the shapes of pi-A curves. Comparison with experiment is currently limited because of the absence of direct methods for observing small 2D micelles or nanometer-sized domains on surfaces. However, on the basis of the shapes of many measured pi-A curves, it is concluded that nanodomains with aggregation numbers in the tens or hundreds must exist if these curves represent the true equilibrium states of the monolayers.