Functionalized double-chain surfactant 1 (potassium O, O＇-didodecylphosphorodithioate) was synthesized. Its small unilamellar vesicles were characterized by dynamic laser light scattering and differential scanning calorimetry and its giant vesicles by phase-contrast optical microscopy. Also, 1＇s giant vesicles containing fluorescent dye 4a (5-carboxyfluorescein) or 4b [5-(dodecanamido)fluorescein] were characterized by epifluorescence microscopy. In a pH 9.0 berate buffer at 25 degrees C, vesicular 1 reacted with 2 (2-chloroethyl phenyl sulfide), a simulant for the chemical warfare agent mustard [bis(2-chloroethyl) sulfide], to give 5 [S-[(2-phenylthio)ethyl] O,O＇-didodecylphosphorodithioate], involving capture of reactive intermediate cation 9 (1-phenylthiocyclopropane) by the anion of 1. This reaction was accompanied by the precipitation of 5, which resulted in wounding/destruction of the vesicles and the release of dye 4a (from giant vesicles). The combination of the conversion of 2 into 5 and dye release suggests the potential of vesicular systems for simultaneous decontamination and signaling of chemical agents, 2 hydrolyzed to give only 6 [2-(phenylthio)ethanol] in the pH 9.0 buffer at 25 degrees C.