Sphingomyelin is a lipid that is abundant in the nervous systems of mammals, where it is associated with putative microdomains in cellular membranes and undergoes alterations due to aging or neurodegeneration. We investigated the effect of varying the concentration of cholesterol in binary and ternary mixtures with N-palmitoylsphingomyelin (PSM) and 1-palmitoyl-2-oleoyl-sn-glycero-3-phosphocholine (POPC) using deuterium nuclear magnetic resonance (H-2 NMR) spectroscopy in both macroscopically aligned and unoriented multilamellar dispersions. In our experiments, we used PSM and POPC perdeuterated on the N-acyl and sn-1 acyl chains, respectively. By measuring solid-state 2 H NMR spectra of the two lipids separately in mixtures with the same compositions as a function of cholesterol mole fraction and temperature, we obtained clear evidence for the coexistence of two liquid-crystalline domains in distinct regions of the phase diagram. According to our analysis of the first moments M, and the observed 2 H NMR spectra, one of the domains appears to be a liquid-ordered phase. We applied a mean-torque potential model as an additional tool to calculate the average hydrocarbon thickness, the area per lipid, and structural parameters such as chain extension and thermal expansion coefficient in order to further define the two coexisting phases. Our data imply that phase separation takes place in raftlike ternary PSM/POPC/cholesterol mixtures over a broad temperature range but vanishes at cholesterol concentrations equal to or greater than a mole fraction of 0.33. Cholesterol interacts preferentially with sphingomyelin only at smaller mole fractions, above which a homogeneous liquid-ordered phase is present. The reasons for these phase separation phenomena seem to be differences in the effects of cholesterol on the configurational order of the palmitoyl chains in PSM-d(31) and POPC-d(31) and a difference in the affinity of cholesterol for sphingomyelin observed at low temperatures. Hydrophobic matching explains the occurrence of raftlike domains in cellular membranes at intermediate cholesterol concentrations but not saturating amounts of cholesterol.