Using a combination of fluorescence correlation and infrared absorption spectroscopies, we characterize lipid lateral diffusion and membrane phase structure as a function of protein binding to the membrane surface. In a supported membrane configuration, cholera toxin binding to the pentasaccharaide headgroup of membrane-incorporated GM(1) lipid alters the long-range lateral diffusion of fluorescently labeled probe lipids, which are not involved in the binding interaction. This effect is prominently amplified near the gel-fluid transition temperature, T-m, of the majority lipid component. At temperatures near T-m, large changes in probe lipid diffusion are measured at average protein coverage densities as low as 0.02 area fraction. Spectral shifts of the methylene symmetric and asymmetric stretching modes in the lipid acyl chain confirm that protein binding alters the fraction of lipid in the gel phase.