A dynamic light scattering setup was used to study the undulations of freely suspended planar lipid bilayers, the so-called black lipid membranes, over a previously inaccessible range of frequency and wave number. A pure synthetic lecithin bilayer, 1,2-dielaidoyl-sn-3-glycero-phoshatidylcholine (DEPC), and binary mixtures of DEPC with 40 mol % of cholesterol, ergosterol, or lanosterol were studied. By analyzing the dynamic light scattering data (oscillation and damping curves) in terms of transverse shear motion, we extracted the lateral tension and surface viscosity of the composite bilayers for each sterol. Cholesterol gave the strongest increase in lateral tension (approximately sixfold) with respect to the DEPC control, followed by lanosterol (approximately twofold), and ergosterol (1.7-fold). Most interestingly, only cholesterol simultaneously altered the surface viscosity of the bilayer by almost two orders of magnitude, whereas the other two sterols did not affect this parameter. We interpret this unique behavior of cholesterol as a result of its previously established out-of-plane motion which allows the molecule to cross the bilayer midplane, thereby effectively coupling the bilayer leaflets to form a highly flexible but more stable composite membrane.