Monolayers of amino acid derivatized diacetylene lipids on water were studied by Langmuir trough and epi-fluorescence microscopy (EFM). Examination of the amino acid derivatized diacetylene Lipids showed a wide variety of surface characteristics with many novel properties. Many of these new properties are advantageous for film-based biosensor development. To characterize this family of molecules, pressure-area ( pi-A) isotherms were measured that demonstrate hydrophilic headgroup compounds allow for close-packed monomolecular layer formation in the solid state upon continuous compression. The effect of subphase pH and temperature on monolayer compressibility and phase transition was examined. Decrease of pH results in attenuation of LE-LC phase transition in Gln-PDA monolayers due to charge screening, while temperature affects the monolayers through regular thermal agitation, and the effect is opposite to the thermal anomaly observed for the non-derivatized diacetylene lipids. EFM studies reveal that only the lipids derivatized with hydrophilic headgroups exhibit phase transition and domain formation, while those with hydrophobic headgroups do not easily form polymerizable matrices. The shape and growth of the domains were found to be strongly headgroup dependent. Photo-polymerization of diacetylene lipid domains on water using EFM is discussed.