Epifluorescence microscopy studies of mixtures of phospholipids and cholest
erol at the air-water interface often exhibit coexisting liquid phases. The
properties of these liquids point to the formation of "condensed complexes
" between cholesterol and certain phospholipids, such as sphingomyelin. It
is found that monolayers that form complexes can incorporate a low concentr
ation of a ganglioside G(M1). This glycolipid is visualized by using a fluo
rescently labeled B subunit of cholera toxin. Three coexisting liquid phase
s are found by using this probe together with a fluorescent phospholipid pr
obe. The three liquid phases are identified as a phospholipid-rich phase, a
cholesterol-rich phase, and a condensed complex-rich phase. The cholera to
xin B labeled ganglioside G(M1) is found exclusively in the condensed compl
ex-rich phase. Condensed complexes are likely present in animal cell membra
nes. where they should facilitate the formation of specialized domains such
as rafts. Condensed complexes also have a major effect in determining the
chemical activity of cholesterol. It is suggested that this chemical activi
ty plays an essential role in the regulation of cholesterol biosynthesis. G
radients in the chemical activity of cholesterol should likewise govern the
rates and direction of intracellular intermembrane cholesterol transport.