The lateral distribution of cholesterol in membranes in the fluid state was investigated by studying the variation of the molar absorption coefficient of pyrene-labelled cholesterol (Py-chol) vs. its concentration in vesicles made of phosphatidylcholine, with variable acyl chain unsaturations. Absorption measurements indicated non-ideal mixing of Py-chol in unsaturated lipids, a process mainly controlled by the cholesterol moiety of the probe. Similar abilities of cholesterol and Py-chol in perturbing the phase properties of pure saturated phosphatidylcholine were observed by DSC experiments. Immiscibility of sterols was corroborated by fluorescence polarization measurements, which indicated a weaker ordering effect of cholesterol in unsaturated membranes. The sizes and the quantities of sterol oligomers formed were calculated. A model for the lateral distribution of cholesterol in membranes is proposed and is applied to known cholesterol/phosphatidylcholine phase diagrams. Finally, the results are discussed with regard to recent models of biological membrane organization, (i.e. rafts).