Cholesterol (or other higher sterols such as ergosterol and phytosterols) is universally present in large amounts (20-40 mol%) in eukaryotic plasma membranes, whereas it is universally absent in the membranes of prokaryotes. Cholesterol has a unique ability to increase lipid order in fluid membranes while maintaining fluidity and diffusion rates. Cholesterol imparts low permeability barriers to lipid membranes and provides for large mechanical coherence. A short topical review is given of these special properties of cholesterol in relation to the structure of membranes, with results drawn from a variety of theoretical and experimental studies. Particular focus is put on cholesterol's ability to promote a special membrane phase, the liquid-ordered phase, which is unique for cholesterol (and other higher sterols like ergosterol) and absent in membranes containing the cholesterol precursor lanosterol. Cholesterol's role in the formation of special membrane domains and so-called rafts is discussed.