Pulsed electron-electron double resonance (PELDOR) spectroscopy is increasingly applied to spin-labeled membrane proteins. However, after reconstitution into liposomes, spin labels often exhibit a much faster transversal relaxation (T(m)) than in detergent micelles, thus limiting application of the method in lipid bilayers. In this study, the main reasons for enhanced transversal relaxation in phospholipid membranes were investigated systematically by use of spin-labeled derivatives of stearic acid and phosphatidylcholine as well as spin-labeled derivatives of the channel-forming peptide gramicidin A under the conditions typically employed for PELDOR distance measurements. Our results clearly show that dephasing due to instantaneous diffusion that depends on dipolar interaction among electron spins is an important contributor to the fast echo decay in cases of high local concentrations of spin labels in membranes. The main difference between spin labels in detergent micelles and membranes is their local concentration. Consequently, avoiding spin clustering and suppressing instantaneous diffusion is the key step for maximizing PELDOR sensitivity in lipid membranes. Even though proton spin diffusion is an important relaxation mechanism, only in samples of low local concentrations does deuteration of acyl chains and buffer significantly prolong T(m). In these cases, values of up to 7 μs have been achieved. Furthermore, our study revealed that membrane composition and labeling position in the membrane can also affect T(m), either by promoting the segregation of spin-labeled species or by altering their exposure to matrix protons. Effects of other experimental parameters including temperature (<50 K), presence of oxygen, and cryoprotectant type are negligible under our experimental conditions.