Using neutron diffraction Harroun et al. [(2006) Biochemistry 45, 1227-1233; (2008) Biochemistry 47, 7090-7096] carried out studies that unequivocally demonstrated cholesterol preferentially sequestering in the middle of bilayers (i.e., flat orientation) made of lipids with polyunsaturated fatty acids (PUFA), in contrast to its "usual" position where its hydroxyl group locates near the lipid/water interface (i.e., upright orientation). Here we clearly show, using neutron diffraction, cholesterol's orientational preference in different lipid bilayers. For example, although it requires 50 mol % POPC (16:0-18:1 PC) in DAPC (di20:4 PC) bilayers to cause cholesterol to revert to its upright orientation, only 5 mol % DMPC (di14:0 PC) is needed to achieve the same effect. This result demonstrates not only cholesterol's affinity for saturated hydrocarbon chains, but also its aversion for PUFAs. Molecular dynamics (MD) simulations performed on similar systems show that in high PUFA content bilayers cholesterol is simultaneously capable of assuming different orientations within a bilayer. Although this result is known from previous MD studies by Marrink et al. [(2008) J. Am. Chem. Soc. 130, 10-11], it has yet to be confirmed experimentally. Importantly, MD simulations predict the formation of DMPC-rich domains, data corroborated by experiment (i.e., 10 mol % DMPC-doped DAPC bilayers), where cholesterol preferentially locates in its upright orientation, while in DMPC-depleted domains cholesterol is found mostly in the bilayer center (i.e., flat orientation). These results lend credence to DMPC's aversion for PUFAs, supporting the notion that domain formation is primarily driven by lipids.