The 18-amino acid amphipathic helical peptide Ac-DWFKAFYDKVAEKFKEAF-NH 2 promotes the separation of cholesterol from the phospholipid, resulting in the formation of cholesterol crystallites, even at mole fractions of cholesterol as low as 0.3. The peptide exerts a greater degree of penetration into membranes of pure phosphatidylcholine in the absence of cholesterol than into bilayers of phosphatidylcholine and cholesterol. The circular dichroism spectrum of the peptide in buffer indicates that it self-associates, leading to the formation of structures with higher helical content. However, in the presence of lipid, the peptide remains helical over a larger concentration range. The peptide undergoes a thermal transition on heating. Cholesterol has little effect on the secondary structure of the peptide; however, increased Trp emission intensity in the absence of cholesterol indicates a deeper penetration of the helix upon removal of cholesterol from the membrane. The results with these model systems demonstrate changes in peptide-lipid interactions that may be related to the observed biological properties of this peptide.