The role of lipid domain size and protein-lipid interfaces in the thermotropic phase transition of dipahnitoylphosphatidylcholine (DPPC) and dimyristoylphosphatidy1choline (DMPC) bilayers in Nanodiscs was studied using small-angle X-ray scattering (SAXS), differential scanning calorimetry (DSC), and generalized polarization (GP) of the lipophilic probe Laurdan. Nanodiscs are water-soluble, monodisperse, self-assembled lipid bilayers encompassed by a helical membrane scaffold protein (MSP). MSPs of different lengths were used to define the diameter of the Nanodisc lipid bilayer from 76 to 108 A and the number of DPPC molecules from 164 to 335 per discoidal structure. In Nanodiscs of all sizes, the phase transitions were broader and shifted to higher temperatures relative to those observed in vesicle preparations. The size dependences of the transition enthalpies and structural parameters of Nanodiscs reveal the presence of a boundary lipid layer in contact with the scaffold protein encircling the perimeter of the disc. The thickness of this annular layer was estimated to be similar to 15 A, or two lipid molecules. SAXS was used to measure the lateral thermal expansion of Nanodiscs, and a steep decrease of bilayer thickness during the main lipid phase transition was observed. These results provide the basis for the quantitative understanding of cooperative phase transitions in membrane bilayers in confined geometries at the nanoscale.