N-Acetyl-LWYIKC-amide, a cholesterol recognition/interaction amino acid consensus (CRAC) peptide, has been found capable of recognizing an exchangeable form of cholesterol in liquid-disordered (l(d)) bilayers derived from 1,2-dipalmitoyl-sn-glycero-3-phosphocholine (DPPC). In sharp contrast, such recognition is barely detectable in analogous cholesterol-rich, liquid-ordered (l(0)) bilayers. These findings represent the first evidence for a peptide favoring a sterol as a nearest-neighbor in fluid bilayers. They also reveal that such recognition can be strongly dependent on the degree of compactness of the membrane.