Ganglioside GM2 is the major lysosomal storage compound of Tay-Sachs disease. It also accumulates in Niemann-Pick disease types A and B with primary storage of SM and with cholesterol in type C. Reconstitution of GM2 catabolism with β-hexosaminidase A and GM2 activator protein (GM2AP) at uncharged liposomal surfaces carrying GM2 as substrate generated only a physiologically irrelevant catabolic rate, even at pH 4.2. However, incorporation of anionic phospholipids into the GM2 carrying liposomes stimulated GM2 hydrolysis more than 10-fold, while the incorporation of plasma membrane stabilizing lipids (SM and cholesterol) generated a strong inhibition of GM2 hydrolysis, even in the presence of anionic phospholipids. Mobilization of membrane lipids by GM2AP was also inhibited in the presence of cholesterol or SM, as revealed by surface plasmon resonance studies. These lipids also reduced the interliposomal transfer rate of 2-NBD-GM1 by GM2AP, as observed in assays using Förster resonance energy transfer. Our data raise major concerns about the usage of recombinant His-tagged GM2AP compared with untagged protein. The former binds more strongly to anionic GM2-carrying liposomal surfaces, increases GM2 hydrolysis, and accelerates intermembrane transfer of 2-NBD-GM1, but does not mobilize membrane lipids.