Despite significant efforts and promising progress, the understanding of membrane protein folding lags behind that of soluble proteins. Insights into the energetics of membrane protein folding have been gained from biophysical studies in membrane-mimicking environments (primarily detergent micelles). However, the development of techniques for studying the thermodynamics of folding in phospholipid bilayers remains a considerable challenge. We had previously used thiol-disulfide exchange to study the thermodynamics of association of transmembrane ␣-helices in detergent micelles; here, we extend this methodology to phospholipid bilayers. The system for this study is the homotetrameric M2 proton channel protein from the influenza A virus. Transmembrane peptides from this protein specifically self-assemble into tetramers that retain the ability to bind to the drug amantadine. Thiol-disulfide exchange under equilibrium conditions was used to quantitatively measure the thermodynamics of this folding interaction in phospholipid bilayers. The effects of phospholipid acyl chain length and cholesterol on the peptide association were investigated. The association of the helices strongly depends on the thickness of the bilayer and cholesterol levels present in the phospholipid bilayer. The most favorable folding occurred when there was a good match between the width of the apolar region of the bilayer and the hydrophobic length of the transmembrane helix. Physiologically relevant variations in the cholesterol level are sufficient to strongly influence the association. Evaluation of the energetics of peptide association in the presence and absence of cholesterol showed a significantly tighter association upon inclusion of cholesterol in the lipid bilayers.