A sensing system for the rapid on-line screening of lipids and biomembrane active compounds in water samples has been successfully developed. The sensor consists of a flow cell and incorporated wafer-based device with on-chip mercury on platinum (Pt/Hg) working electrode and platinum (Pt) auxiliary and pseudo-reference electrodes. To optimise system performance, the following experiments were carried out: (i) Deposition and removal of phospholipid layers on and from Pt/Hg electrodes respectively, (ii) Effect of electrode size on signal, (iii) Monitoring of different phospholipids deposited in flow cell and, (iv) Detection of phospholipid monolayer interaction with representative compounds. The results showed that: (i) Miniaturisation and ruggedisation of the mercury (Hg)/phospholipid system has been successfully achieved, (ii) Rapid cyclic voltammetry facilitates repetitive dioleoyl phosphatidylcholine (DOPC) monolayer formation on Hg from aqueous DOPC dispersion and, (iii) The device responds selectively to organic compounds injected into electrolyte flow.