1,2-Distearoyl-sn-glycero-3-phosphoethanolamine (DSPE)-poly(ethylene glycol) with conjugated orthopyridyl disulfide (OPSS or PDP) (DSPE-PEG-OPSS) is a linear heterobifunctional PEGylation reagent with a DSPE phospholipid and a orthopyridyl disulfide. DSPE-PEG-OPSS, is an 18 carbon phospholipid PEG conjugate which has both hydrophilicity and hydrophobility. It is a useful self-assembling reagent to prepare PEGylated liposome or micelle while also providing a thiol or cysteine reactive maleimide group. It is often used in targeted drug delivery with the lipid bilayer to improve drug solubility, the PEG to provide stealth property, extend circulation half-life and reduce non-specific protein binding or cell adhesion, and the reactive maleimide to bioconjugate targeting molecules including antibody, aptamer, protein, and peptide. Orthopyridyl disulfide or pyridyldithio functional group can selectively reacts with free thiol, SH, sulfhydryl or mercapto to form a oxidation, reduction reversible disulfide bond. Pegylation of phospholipids significantly improves the blood circulation time and stability for encapsulated drugs.