Perfringolysin O (PFO), a cytolytic toxin secreted by pathogenic Clostridium perfringens, forms large pores in cholesterol-containing membranes. Domain 4 (D4) of the protein interacts first with the membrane and is responsible for cholesterol recognition. By using several independent fluorescence techniques, we have determined the topography of D4 in the membrane-inserted oligomeric form of the toxin. Only the short hydrophobic loops at the tip of the D4 beta-sandwich are exposed to the bilayer interior, whereas the remainder of D4 projects from the membrane surface and is surrounded by water, making little or no contact with adjacent protein monomers in the oligomer. Thus, a limited interaction of D4 with the bilayer core seems to be sufficient to accomplish cholesterol recognition and initial binding of PFO to the membrane. Furthermore, D4 serves as the fulcrum around which extensive structural changes occur during the formation and insertion of the large transmembrane beta-barrel into the bilayer.