The hypothesis is proposed that the relationship between the level of cholesterol in a cellular or sub-cellular membrane and the activity of any membrane function affected by cholesterol is ogival in nature, i.e, there is an optimum level of membrane cholesterol at which functional activity is maximal, and above or below this level activity declines. Data already published from other laboratories, when analysed in this manner, show clearly that this hypothesis appears to hold true for at least several membrane-bound systems, in particular the microsomal enzyme cerebroside sulfotransferase and transmembrane ATP/ADP exchange and glucose transport.