We previously reported on a novel system termed Lipobead that consists of hydrogel beads encased within an anchored lipid bilayer. The hydrogel particles are formed by inverse suspension polymerization of dimethylacrylamide with N,N'-ethylenebis(acrylamide). During the polymerization stage, the water in oil emulsion is interfacially stabilized by small molecule surfactants as well as a small percentage of lipid functionalized with a vinyl group. The functionalized lipid becomes tethered to the bead surface and promotes the assembly of a lipid bilayer on the surface of the hydrogel beads. The presence of the functionalized lipid during polymerization dramatically alters the yield, average size, and size distribution of beads produced. This paper examines the effect of various chemical and physical processing parameters on the average size and size distribution of beads produced when lipid is a component of the surfactant mixture. Relationships between the processing parameters, average bead size, and size distribution were established. Macroscopic properties of the lipid bilayers of Lipobeads were also evaluated including phase transition temperature as well as permeability to the small polar molecule, adenosine triphosphate. It was established that the presence of functionalized lipid improves the organization of the bilayer on the Lipobead surface.