Yes, there is a size limit to distribution lists stored on the Exchange server. It is based on the size of contacts, not the number of contacts. If you use the very basic information for contacts (for example, only the name and the email address), your distribution list limit may be 125 to 130 contacts. So, if you have a lot of information for each of your contacts, you will have fewer addresses per list.
For more information, please visit the following webpage:
http://support.microsoft.com/kb/238569
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