All biological membranes are primarily phospholipid membranes. 1, 2-Dihexadecanoyl-sn-glycero-3-phosphocholine (DPPC) is the major phosphatidylcholine (phospholipid) found in the biological membranes like membranes of lung tissues and nuclear membranes of animal cells. A thorough study of DPPC may provide a better understanding of membrane properties. DPPC, being a phospholipid, has both hydrophilic (phosphocholine group) and hydrophobic (diglyceride group) regions. Because of its amphoteric nature, DPPC has been used as a surfactant in the formulation of liposome drug delivery systems and also as lung surfactant in most of the dosage forms used in the treatment of respiratory diseases. It has been stated that “the phosphatidylcholines exhibit polymorphism and generally exist in the form of their monohydrates”. A detailed physical-chemical characterization should provide a better understanding of the structure of the polymorphic states and explain the behavior of DPPC under various conditions. Physical-chemical characterization of DPPC is performed using Differential Scanning Calorimetry, Thermogravimetric Analysis, Powder X-ray Diffraction, Fourier Transform Infrared Spectroscopy, Hot Stage Microscopy, Capillary Melting and Karl Fischer titration studies. These studies form valuable pre-formulation studies and help us to manufacture better dosage forms using this compound. Since, the fatty acid present in this compound is palmitic acid, palmitic acid and its derivatives (palmityl alcohol and methyl palmitate) are also characterized and the characteristics will be compared with those of DPPC.