It has been proposed that annexin I has two separate interaction sites that are involved in membrane binding and aggregation, respectively. To better understand the mechanism of annexin I-mediated membrane aggregation, we investigated the properties of the inducible secondary interaction site implicated in membrane aggregation. X-ray specular reflectivity measurements showed that the thickness of annexin I layer bound to the phospholipid monolayer was 31 ± 2 Å, indicating that annexin I binds membranes as a protein monomer or monolayer. Surface plasmon resonance measurements of annexin I, V, and mutants, which allowed evaluation of membrane aggregation activity of annexin I separately from its membrane binding, revealed direct correlation between the relative membrane aggregation activity and the relative affinity of the secondary interaction site for the secondary membrane. The secondary binding was driven primarily by hydrophobic interactions, unlike calcium-mediated electrostatic primary membrane binding. Chemical cross-linking of membrane-bound annexin I showed that a significant degree of lateral association of annexin I molecules precedes its membrane aggregation. Taken together, these results support a hypothetical model of annexin I-mediated membrane aggregation, in which a laterally aggregated monolayer of membrane-bound annexin I directly interacts with a secondary membrane via its induced hydrophobic interaction site.