Suspensions of dipalmitoylphosphatidylglycerol (DPPG) have been analyzed by differential scanning calorimetry, equilibrium and differential scanning dilatometry, and X-ray diffraction techniques. After the DPPG suspensions are stored several days at 2 degrees C, a new phase transition is observed at a lower temperature than either the main transition or the pretransition. This subtransition has an enthalpy of about 6 kcal/mol and occurs at about 20 degrees C, the exact temperature depending on the buffer used. The lipid partial specific volume increases by 0.035 mL/g upon warming through the subtransition. X-ray diffraction patterns from suspensions in the subgel phase contain orders of a lamellar repeat and several additional sharp and broad wide-angle reflections between 8 and 2 A. As the water content in the specimen is reduced, the lamellar repeat period decreases, whereas the spacings and intensities of these additional wide-angle reflections are unchanged. These data indicate that on incubation at 2 degrees C the lipid molecules crystallize in the plane of each bilayer. X-ray experiments also show that this subgel phase converts to the normal L beta' gel phase above the subtransition.