CLIC1 belongs to the ubiquitous family of chloride intracellular ion channel proteins that are evolutionarily conserved across species. The CLICs are unusual in that they exist mainly as soluble proteins but possess the intriguing property of spontaneous conversion from the soluble to an integral membrane-bound form. This conversion is regulated by the membrane lipid composition, especially by cholesterol, together with external factors such as oxidation and pH. However, the precise physiological mechanism regulating CLIC1 membrane insertion is currently unknown. In this study, X-ray and neutron reflectivity experiments were performed to study the interaction of CLIC1 with different phospholipid monolayers prepared using POPC, POPE, or POPS with and without cholesterol in order to better understand the regulatory role of cholesterol in CLIC1 membrane insertion. Our findings demonstrate for the first time two different structural orientations of CLIC1 within phospholipid monolayers, dependent upon the absence or presence of cholesterol. In phospholipid monolayers devoid of cholesterol, CLIC1 was unable to insert into the lipid acyl chain region. However, in the presence of cholesterol, CLIC1 showed significant insertion within the phospholipid acyl chains occupying an area per protein molecule of 6-7 nm2 with a total CLIC1 thickness ranging from ∼50 to 56 Å across the entire monolayer. Our data strongly suggests that cholesterol not only facilitates the initial docking or binding of CLIC1 to the membrane but also promotes deeper penetration of CLIC1 into the hydrophobic tails of the lipid monolayer.