This paper reports an all-atom molecular dynamics simulation of lipid bilayers With different cholesterol/sphingomyelin molar ratios. Our results reveal structural and dynamic changes suggesting the random distribution of lipids along the bilayer planes is Supplanted at cholesterol concentrations above 30 mol % by the formation of a liquid-ordered phase, which is thought to be the precursor to lipid raft formation. The packing of molecules in the bilayer is shown to be associated with the hydrogen bonding between cholesterol and sphingomyelin. The molecules tend to migrate toward distributions in which the sphingomyelin molecule forms on average one hydrogen bond with a cholesterol molecule. The threshold for activation of this packing trend coincides with the experimentally determined threshold membrane activity of a cytolytic protein ostreolysin, which binds to and permeabilizes cholesterol - sphingomyelin bilayers containing more than 30 mol % cholesterol.