Cells contain high levels of macromolecular crowding; understanding how macromolecular crowding impacts the behaviour of biological systems can give new insights into biological phenomena and disease pathologies. In this study, we assess the effect of macromolecular crowding on the catalytic activity of the biomembrane binding protein phospholipase A1 (PLA1). Using 3D-printed equilibrium dialysis chambers we show that macromolecular crowding increases the binding of PLA1 to lipid vesicles. However, using a mass spectrometry assay of the hydrolysis of 1,2-dioleoyl-sn-glycero-3-phosphocholine (DOPC) by PLA1 we surprisingly find that macromolecular crowding decreases the reaction rate and causes early cessation of the catalytic activity of PLA1. Using kinetic equilibrium modelling, we are able to estimate the effect of macromolecular crowding on the association and dissociation rate constants for PLA1 binding to the lipid vesicles. These data, coupled with particle sizing measurements enable us to construct a model to explain the early cessation of catalytic activity of PLA1 with increasing levels of macromolecular crowding. This model suggests that compositional changes in the membrane, due to PLA1 action, lead to the formation of larger vesicles, which deactivate the protein. This process is more rapid in the presence of macromolecular crowding agents, suggesting that a more detailed understanding of the effects of macromolecular crowding on membrane dynamics is required to understand membrane interacting proteins in macromolecularly crowded environments. The implications of this discovery are significant given the wide range of roles of membrane fusion and fission in neurocognitive processes and the failure of these processes in neurodegenerative diseases.