Certain diacetylenic phospholipids form liposomes in water above their chain melting transitions, which, if slowly cooled, quantitatively convert to hollow tubular structures about 1 .mu.m in diameter and as long as hundreds of micrometers. To elucidate the nature of the conversion process, freeze fracture electron microscopy was utilized to examine samples that were rapidly quenched during tubule formation. Many transitional structures were observed, typically liposomes partially wrapped around nascent tubules. This is consistent with real-time imaging by optical microscopy indicating tubule growth by continuous transfer of lipid bilayers from liposomes by a rolling-up process. The mechanism of the conversion process, combined with preliminary X-ray scattering data indicating unusual packing of the lipid molecules, suggests an explanation for the efficiency of the conversion process and why the tubule is a favorable microstructure for the crystalline lipid.