The vertical location of 30 mol % cholesterol in a hydrated dimyristoylphosphatidylcholine (DMPC) membrane was determined by neutron diffraction on annealed samples containing deuterated or protonated cholesterol at 10, 20, 25, 30, and 50 degreesC. The sterol was deuterium-labeled in positions 2, 2, 3, 4, 4, and 6, and proton-deuterium contrast techniques were used to locate the position of the labeled part of the steroid in the membrane. Cholesterol. is found well embedded in the membrane,with ring A at 16.3 +/-;0.5 Angstrom from the bilayer center at 10 degreesC. This location linearly decreases to 15.1 +/- 0.5 A at 50 degreesC, demonstrating that the sterol is not expelled from the membrane on crossing the former gel-to-fluid phase transition of pure DMPC (24 degreesC). Molecular dynamics were also performed on well-hydrated membranes in the presence and absence of cholesterol. Neutron scattering ID profiles were then calculated for comparison with experimental neutron scattering data. The profile obtained from pure fluid-phase lipids is in nice agreement both in shape and in bilayer hydrophobic thickness with the experiment. The pure gel-phase calculation leads to the correct line shape but with an overestimated bilayer thickness. In the presence of cholesterol, only the calculation performed with initial gel-phase conditions leads to a hydrophobic thickness in agreement with neutron data. Ring A of cholesterol is found at 15.2 +/-0.5 Angstrom at 10 degreesC, underestimating the experimental value by only 1 Angstrom. Molecular dynamics show that the hydroxyl group of cholesterol is hydrated and in such a proximity to the carboxyl oxygens of the phospholipids that it can make hydrogen bonds. The ability for molecular dynamics calculations on membranes to determine structural data in membranes is finally discussed.