We describe a simple approach to the controlled removal of molecules from the membrane of large unilamellar vesicles made of fatty acids. Such vesicles shrink dramatically upon mixing with micelles composed of a mixture of fatty acid and a phospholipid (1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC)), as fatty acid molecules leave the vesicle membrane and accumulate within the mixed micelles. Vesicle shrinkage was confirmed by dynamic light scattering, fluorescence recovery after photobleaching of labeled vesicles, and fluorescence resonance energy transfer between lipid dyes incorporated into the vesicle membrane. Most of the encapsulated impermeable solute is retained during shrinkage, becoming concentrated by a factor of at least 50-fold in the final small vesicles. This unprecedented combination of vesicle shrinkage with retention of contents allows for the preparation of small vesicles containing high solute concentrations, and may find applications in liposomal drug delivery.