We have applied a hybrid equilibration and sampling procedure for the atomic-level simulation of a hydrated lipid bilayer to systems consisting of dipalmitoyl phosphatidylcholine (DPPC) and cholesterol. The procedure is applied to a bilayer of 64 molecules of DPPC, 64 molecules of cholesterol, and 4116 waters (1:1 ratio), and to a bilayer of 108 molecules of DPPC, 54 molecules of cholesterol, and 5301 waters (2:1 ratio). After equilibration three separate continuous molecular dynamics runs, separated by 10 000 configurational bias Monte Carlo steps, were carried out for each system. Properties of the systems were calculated and averaged over the three separate runs. A striking result from the simulations is the overall similarity of lipid structure in the 1:1 and the 2:1 systems. The area per DPPC, lipid chain order parameter profiles, and atom distribution are all very similar for the two systems, in agreement with available experimental data. The calculated dipole potential profiles reveal differences in the electrostatic environment in the two systems. Based on simulation data we suggest that there is a critical lipid:cholesterol ratio above 2:1 but probably below 4:1 at which cholesterol forces DPPC chains into gel-like conformational order. (C) 2001 American Institute of Physics.