We report some novel morphological observations on the interaction of the polyene antibiotic filipin (crude complex) with cholesterol, studied in non-cellular systems with replication, freeze-fracture, and negative stain techniques. Cholesterol crystals, lecithin liposomes containing 0 to 20 mole% of cholesterol, and liposomes containing 10 mole% of cholesterol and 5 to 40 mole% of sphingomyelin were incubated for varying lengths of time with filipin at different cholesterol: filipin molar ratios. The resulting filipin-induced lesions (FIL) were pleomorphic in all systems studied. In replicas of crystals, FIL appeared as ridges which were either straight, or curved into C- and S-shaped figures or closed circles. Negatively stained preparations showed FIL as white lines of the same configurations and in addition revealed a delicate veil attached to individual FIL. FIL, fused by their veils into clusters or large sheets ("holey sheets"), were shed from crystals. Incubation of liposomes for 1 h at cholesterol:filipin molar ratios of 4:1, 2:1, 1:1, and 1:5, demonstrated that cholesterol detection (i.e. formation of FIL) depend upon the ratio of cholesterol to filipin. At a 1:1 molar ratio FIL formed on liposomes containing 10 mole% cholesterol or more, but detectability increased to 5 mole% at the 1:5 ratio. Increasing the molar ratio of cholesterol:filipin to 2:1 and 4:1 decreased cholesterol detectability to between 10 and 20 mole%. Increasing concentrations of sphingomyelin decreased cholesterol detectability at the 1:1 cholesterol:filipin ratio; further, FIL in sphingomyelin-containing liposomes tended towards larger diameters. Filipin induced aggregation of liposomes and linked them together by holey sheets, providing evidence for filipin-induced extraction of cholesterol from liposomes. Taken together our morphological observations on filipin-cholesterol interaction in non-cellular systems raise pertinent questions as to the feasibility of filipin as a cholesterol probe in cellular systems.