The lipid bilayer component of biological membranes is important for the distribution, organization, and function of bilayer-spanning proteins. This regulation is due to both specific lipid-protein interactions and general bilayer-protein interactions, which modulate the energetics and kinetics of protein conformational transitions, as well as the protein distribution between different membrane compartments. The bilayer regulation of membrane protein function arises from the hydrophobic coupling between the protein's hydrophobic domains and the bilayer hydrophobic core, which causes protein conformational changes that involve the protein/bilayer boundary to perturb the adjacent bilayer. Such bilayer perturbations, or deformations, incur an energetic cost, which for a given conformational change varies as a function of the bilayer material properties (bilayer thickness, intrinsic lipid curvature, and the elastic compression and bending moduli). Protein function therefore is regulated by changes in bilayer material properties, which determine the free-energy changes caused by the protein-induced bilayer deformation. The lipid bilayer thus becomes an allosteric regulator of membrane function.