The condensing effect of cholesterol on fluid bilayers of 1,2-dipalmitoyl-sn-glycero-3-phosphocholine has been compared with that of dihydrocholesterol and coprostanol by means of nearest-neighhor recognition measurements. Whereas dihydrocholesterol exhibits a condensing power that is equivalent to that of cholesterol, the action of coprostanol is significantly weaker. These results provide strong support for a template mechanism of condensation and argue against an umbrella mechanism.