Proteins can adjust their structure and function in response to shifting environments. Functional diversity is created not only by the sequence but by changes in tertiary structure. Here we present evidence that lipid cofactors may enable otherwise unstable protein folding variants to maintain their conformation and to form novel, biologically active complexes. We have identified unsaturated C18 fatty acids in the cis conformation as the cofactors that bind apo alpha-lactalbumin and form HAMLET (human alpha-lactalbumin made lethal to tumor cells). The complexes were formed on an ion exchange column, were stable in a molten globule-like conformation, and had attained the novel biological activity. The protein-fatty acid interaction was specific, as saturated C18 fatty acids, or unsaturated C18:1trans conformers were unable to form complexes with apo alpha-lactalbumin, as were fatty acids with shorter or longer carbon chains. Unsaturated cis fatty acids other than C18:1:9cis were able to form stable complexes, but these were not active in the apoptosis assay. The results demonstrate that stereo-specific lipid-protein interactions can stabilize partially unfolded conformations and form molecular complexes with novel biological activity. The results offer a new mechanism for the functional diversity of proteins, by exploiting lipids as essential, tissue-specific cofactors in this process.