Studies of biological membrane heterogeneity particularly benefit from the use of the environment-sensitive fluorescent probe Laurdan, for which shifts in the emission, produced by any stimulus (e.g., fluidity variations), are ascribed to alterations in hydration near the fluorophore. Ironically, no direct measure of the influence of the membrane hydration level on Laurdan spectra has been available. To address this, we investigated the fluorescence spectrum of Laurdan embedded in solid-supported lipid bilayers as a function of hydration and compared it with the effect of cholesterol─a major membrane fluidity regulator. The effects are illusively similar, and hence the results obtained with this probe should be interpreted with caution. The dominant phenomenon governing the changes in the spectrum is the hindrance of the lipid internal dynamics. Furthermore, we unveiled the intriguing mechanism of dehydration-induced redistribution of cholesterol between domains in the phase-separated membrane, which reflects yet another regulatory function of cholesterol.