Theonellamides (TNMs) are members of a distinctive family of antifungal and cytotoxic bicyclic dodecapeptides isolated from the marine sponge Theonella sp. Recently, it has been shown that TNMs recognize 3β-hydroxysterol-containing membranes, induce glucan overproduction, and damage cellular membranes. However, to date, the detailed mode of sterol binding at a molecular level has not been determined. In this study, to gain insight into the mechanism of sterol recognition of TNM in lipid bilayers, surface plasmon resonance (SPR) experiments and solid-state deuterium nuclear magnetic resonance ((2)H NMR) measurements were performed on theonellamide A (TNM-A). SPR results revealed that the incorporation of 10 mol % cholesterol or ergosterol into 1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC) membranes significantly enhances the affinity of the peptide for the membrane, particularly in the initial binding to the membrane surface. These findings, together with the fact that binding of TNM-A to epicholesterol (3α-cholesterol)-containing liposomes and pure POPC liposomes was comparably weak, confirmed the preference of the peptide for the 3β-hydroxysterol-containing membranes. To further establish the formation of the complex of TNM-A with 3β-hydroxysterols in lipid bilayers, solid-state (2)H NMR measurements were conducted using deuterium-labeled cholesterol, ergosterol, or epicholesterol. The (2)H NMR spectra showed that TNM-A significantly inhibits the fast rotational motion of cholesterol and ergosterol, but not epicholesterol, therefore verifying the direct complexation between TNM-A and 3β-hydroxysterols in lipid bilayers. This study demonstrates that TNM-A directly recognizes the 3β-OH moiety of sterols, which greatly facilitates its binding to bilayer membranes.