The generation of liquid ordered domains in model membranes can be linked to raft formation in cellular membranes. The lipid composition has a governing influence on domain formation and consequently, biochemical degradation of specific lipid components has the potential to alter domain features. Activation of Phospholipase A(2) (PLA2) by ternary (DOPC,DPPC,Cholesterol) model membranes can potentially change the domain structure by preferential hydrolysis of the phospholipids. This work investigates by time-lapse microscopy the changes in domain features which occurs upon PLA2 activation by such ternary membranes. Double supported membranes are used, which have minimal interactions with the solid support. For membranes prepared in the coexistence region, PLA2 induces a decrease of the liquid disordered (Ld) phase and an increase of the liquid ordered (Lo) phase. A striking observation is that activation by a uniform membrane in the Ld phase leads to nucleation and growth of Lo-like domains. This phenomenon relies on the initial presence of cholesterol and no activation is observed by membranes purely in the Lo phase. The observations can be rationalized by mapping partially hydrolyzed islands onto trajectories in the phase diagram. It is proposed that DPPC is protected from hydrolysis through interactions with cholesterol, and possibly the formation of condensed complexes. This leads to specific trajectories which can account for the observed trends. The results demonstrate that PLA2 activation by ternary membrane islands may change the global lipid composition and remodel domain features while preserving the overall membrane integrity. A. C. Simonsen, Biophysical Journal (2008, accepted, BioFAST doi:10.1529/biophysj.107.114363)