The effect of cholesterol on rhodopsin stability has been investigated in intact disk membranes. Because cholesterol readily equilibrates between membranes, the disk membrane cholesterol content can be altered by incubation with cholesterol/phospholipid vesicles. The effect of membrane cholesterol on rhodopsin was investigated using three independent techniques: thermal bleaching, differential scanning calorimetry (DSC) and activation of the cGMP cascade. Rhodopsin exhibited an increased resistance to thermally induced bleaching as the membrane cholesterol level was increased. DSC also indicated that the protein is stabilized by cholesterol in that the Tm increased in response to higher membrane cholesterol. A similar degree of stabilization was observed in both the unbleached and bleached states in the DSC experiments. These results suggest that cholesterol affects the disk membrane properties such that thermally induced unfolding is inhibited, thus stabilizing the rhodopsin structure. Furthermore, high membrane cholesterol inhibited the activation of the cGMP cascade. This is consistent with the stabilization of the metarhodopsin I photointermediate relative to the metarhodopsin II intermediate.