A fluoro-tagged N-acetylglucosamine-capped glycolipid that can form lipid microdomains in fluid phospholipid bilayers has been shown to be enzymatically galactosylated by bovine beta(1,4)-galactosyltransferase. MALDI MS, HPLC, and LC-MS revealed that the rate of enzymatic transformation was significantly enhanced by lipid clustering; at a 1% mol/mol loading, clustered glycolipids were galactosylated 9-fold faster than glycolipids dispersed across the bilayer surface. The transformation of the GlcNAc "glycocalyx" into a Gal(beta 1-4)GlcNAc "glycocalyx" relabeled these vesicles, making them susceptible to agglutination by Erythrina cristagalli lectin (ECL). The kinetic parameters for this transformation revealed a lower apparent K-m when the substrate lipids were clustered, which is attributed to multivalent binding to an extended substrate cleft around the active site. These observations may have important implications where soluble enzymes act on substrates embedded within cellular lipid rafts.