At low mole fractions, cholesterol segregates into 10-to 100-nmdiameter nanodomains dispersed throughout primarily dipalmitoylphosphatidylcholine (DPPC) domains in mixed DPPC:cholesterol monolayers. The nanodomains consist of 6:1 DPPC:cholesterol "complexes" that decorate and lengthen DPPC domain boundaries, consistent with a reduced line tension, λ. The surface viscosity of the monolayer, η s , decreases exponentially with the area fraction of the nanodomains at fixed surface pressure over the 0.1-to 10-Hz range of frequencies common to respiration. At fixed cholesterol fraction, the surface viscosity increases exponentially with surface pressure in similar ways for all cholesterol fractions. This increase can be explained with a free-area model that relates η s to the pure DPPC monolayer compressibility and collapse pressure. The elastic modulus, G′, initially decreases with cholesterol fraction, consistent with the decrease in λ expected from the line-active nanodomains, in analogy to 3D emulsions. However, increasing cholesterol further causes a sharp increase in G′ between 4 and 5 mol% cholesterol owing to an evolution in the domain morphology, so that the monolayer is elastic rather than viscous over 0.1-10 Hz. Understanding the effects of small mole fractions of cholesterol should help resolve the controversial role cholesterol plays in human lung surfactants and may give clues as to how cholesterol influences raft formation in cell membranes.surface rheology | isotherms | free-volume model | AFM M inute fractions of cholesterol lead to dramatic changes in dipalmitoylphosphatidylcholine (DPPC) monolayer morphology (Figs. 1-3) (1, 2) and have equally dramatic effects on monolayer dynamic properties. One weight percent cholesterol reduces the surface viscosity, η s , of DPPC monolayers by an order of magnitude, and 2 wt% reduces η s by two orders of magnitude . Atomic force microscopy (AFM) images and microrheological data show that the cholesterol is segregated to lineactive, locally disordered nanodomains that are dispersed in and separate ordered, primarily DPPC domains. As a result, the monolayer retains many of the features of pure DPPC monolayers including a high collapse pressure, high compressibility, and so on, while having significantly lower surface viscosity. This surface viscosity effect suggests a role for cholesterol in lung surfactant (LS), a lipid-protein monolayer necessary to reduce the surface tension in the lung alveoli during respiration (Fig. S1) (3, 4). At present, even the existence of cholesterol in native LS is questioned, because the lung lavage required to harvest LS inevitably causes blood and cell debris to be coextracted, potentially contaminating LS with cholesterol (5). This lack of consensus over the role of cholesterol is reflected in the composition of replacement lung surfactants for neonatal respiratory distress syndrome (NRDS), which occurs in 20,000-30,000 premature births each year (6). Survanta and Curosurf, two clinically approved animalextract replacement surfact...