Animal cell membranes pose conceptual problems related to the physical chemistry of liquids. An avenue to the solution of some of these problems has been opened by the discovery of liquid-liquid immiscibility in synthetic membranes composed of cholesterol and phospholipids. This discovery has led to the development of a thermodynamic model involving condensed complexes. In this model, the phospholipids with longer fatty-acid chains react reversibly with cholesterol to form complexes. The complexes themselves can have a repulsive interaction with other phospholipids, leading to immiscibility. A striking example of this effect is revealed in the phase diagrams of ternary mixtures of cholesterol, a saturated phosphatidylcholine (or sphingomyelin), and an unsaturated phosphatidylcholine. As found by a number of investigators, all binary pairs are miscible in bilayers, whereas the ternary mixture can form two liquid phases. The model of condensed complexes accounts for this effect. Condensed complexes also have a major effect on the chemical activity of cholesterol and on the ordering of phospholipid acyl chains both in the presence and absence of phase separations. Model calculations of phospholipid order parameters account for several features of the deuterium NMR spectra of labeled phospholipid molecules in bilayer mixtures with cholesterol.chemical activity ͉ deuterium NMR ͉ membrane ͉ phase diagrams A number of early investigators have interpreted various physical chemical effects of cholesterol on phospholipids in membranes in terms of the formation of cholesterolphospholipid complexes (1-5). The use of complexes to account for the properties of nonideal liquids has a long history (6, 7). Even so, this chemical picture of cholesterolphospholipid interactions has been criticized in later work, because such complexes have never been isolated, and molecular dynamics calculations have not suggested specific molecular structures (8 -11). Nonetheless, more recent studies have demonstrated the utility of a quantitative thermodynamic model for the formation of complexes between cholesterol and the more saturated phospholipids. In this model, the complexes were referred to as ''condensed complexes'' in recognition of the well-known effect of cholesterol in ordering the fatty-acid chains of phospholipids (12, 13). This thermodynamic model implies short-range order, but there is no requirement that the complexes have highly specific, static molecular structures. That is, the complexes may have structures that f luctuate rapidly over a range of conformations.A striking example of the utility of the condensed complex model is provided by recent determinations of the ternary phase diagrams of lipid mixtures (14, 15). These diagrams describe mixtures of cholesterol and two phospholipids, one phospholipid with a relatively high melting temperature and the other with a low melting temperature. For these lipids, no binary pair shows liquid-liquid immiscibility, whereas some ternary mixtures form two liquid phases (14-17). That i...