The myelin sheath is a tightly packed multilayered membrane structure insulating selected axons in the central and the peripheral nervous systems. Myelin is a biochemically unique membrane, containing a specific set of proteins. In this study, we expressed and purified recombinant human myelin P2 protein and determined its crystal structure to a resolution of 1.85 Å. A fatty acid molecule, modeled as palmitate based on the electron density, was bound inside the barrel-shaped protein. Solution studies using synchrotron radiation indicate that the crystal structure is similar to the structure of the protein in solution. Docking experiments using the high-resolution crystal structure identified cholesterol, one of the most abundant lipids in myelin, as a possible ligand for P2, a hypothesis that was proven by fluorescence spectroscopy. In addition, electrostatic potential surface calculations supported a structural role for P2 inside the myelin membrane. The potential membrane-binding properties of P2 and a peptide derived from its N terminus were studied. Our results provide an enhanced view into the structure and function of the P2 protein from human myelin, which is able to bind both monomeric lipids inside its cavity and membrane surfaces.