Aqueous dispersions of cholesterol-containing phosphatidylethanolamine (PE) bilayers were examined by a combination of high-sensitivity differential scanning calorimetry (DSC), Fourier transform infrared (FTIR) and 31P-nuclear magnetic resonance spectroscopy. Regardless of hydrocarbon chain length, the incorporation of low levels of cholesterol into these bilayers causes progressive reductions in the temperature, enthalpy and overall cooperativity of the lipid hydrocarbon chain-melting phase transition. Moreover, at low cholesterol levels, the heating and cooling thermograms observed for the cholesterol/PE binary mixtures are similar, indicating comparable levels of lateral miscibility of cholesterol with PE bilayers in the gel and liquid-crystalline states. However, at higher levels of cholesterol incorporation, marked differences between the heating and cooling thermograms are noted. Upon heating, complex multicomponent thermograms are observed in PE bilayers containing large amounts of cholesterol, and the temperature and overall enthalpy values increase discontinuously from the pattern of monotonic decrease observed at lower cholesterol levels. Moreover, these discontinuities begin to emerge at progressively lower cholesterol concentrations as PE hydrocarbon chain length increases. Upon cooling, a simpler pattern of thermotropic behavior is observed, and the measured temperature and enthalpy values continue to decrease monotonically with increases in cholesterol content. These results suggest that at higher concentrations cholesterol exhibits a decreased degree of lateral miscibility in the gel or crystalline as compared to the liquid-crystalline states of PE bilayers, particularly in the case of the longer-chain PEs. Our FTIR and 31P-nuclear magnetic resonance spectroscopic studies also show that the thermotropic events observed with mixtures of low cholesterol content are analogous to the gel/liquid-crystalline phase transitions exhibited by the pure PEs. However, lamellar crystalline phases readily form when mixtures of high cholesterol content are cooled to low temperatures. Moreover, these crystalline phases are spectroscopically indistinguishable from those formed by the pure PEs, indicating that cholesterol is excluded from such phases. Upon subsequent heating, the melting of these crystalline phases gives rise to the complex thermograms detected by DSC and to the discontinuities in the phase transition temperature and enthalpy noted above. This pattern of behavior differs markedly from that observed with the corresponding phosphatidylcholines (PCs), where comparable degrees of cholesterol miscibility are observed in the gel and liquid-crystalline states even at high cholesterol concentrations, and where cholesterol inhibits rather than facilitates the formation of lamellar crystalline phases. We also find that the presence of cholesterol does not result in the hydrophobic mismatch-dependent shifts in the phase transition temperature in PE bilayers previously observed in PC bilayers of varying thickness. We attribute these differences in the effects of cholesterol on phospholipid thermotropic phase behavior to stronger electrostatic and hydrogen bonding interactions at the surfaces of PE and compared to PC bilayers.