A simple dilution method to determine the hydrodynamic volume fraction of vesicle suspensions is presented. The vesicle suspension is diluted with a solution containing a tracer Y, which is similar to a component X already present in the suspending fluid and which does not bind to or permeate through the vesicles. The concentrations of X and Y in the suspending fluid measured after dilution are used to determine the volume fraction. Using this technique, the volume fractions of vesicle suspensions comprising cationic vesicles prepared in solutions of CaCl2 (X) were measured by dilution with MgCl2 (Y) solutions. Various experimental parameters such as the concentration of the MgCl2 diluents and the dilution volume ratio were studied and their effects optimized to arrive at a robust recipe for measuring the volume fraction. It is demonstrated that the technique can be applied to concentrated suspensions containing multilamellar and polydisperse vesicles.