Streptolysin O is a member of a family of membrane‐damaging toxins that bind to cell membranes containing cholesterol and then polymerize to form large pores. We have examined the kinetics of toxin action using 125I‐labelled streptolysin O. Binding of toxin monomers to membranes displays first‐order kinetics and is reversible; the rate of desorption from red cells shows a marked dependence on temperature. To study oligomerization, toxin was bound to erythrocytes at 0°C. Oligomer formation was then triggered by a sudden temperature shift and stopped by solubilization of membranes with deoxycholate. While at moderately high streptolysin O concentrations oligomerization behaves as a reaction of second order, the kinetic pattern changes with increasing toxin concentration. We show that this can be accounted for by the assumption of a two‐step reaction mechanism: two membrane‐bound monomers first associate into a start complex, which then is rapidly extended by the sequential addition of further monomers up to the final oligomer size.