In phospholipids, the two fatty acids are hydrophobic, or insoluble in water. But the phosphate group is hydrophilic, or soluble in water. When phospholipids are mixed with water, they spontaneously rearrange themselves to form the lowest free-energy configuration. This means that the hydrophobic regions find ways to remove themselves from water, while the hydrophilic regions interact with water. The resulting structure is called a lipid bilayer.