Sphingomyelin and cholesterol are membrane lipids that interact to form liquid-ordered phase believed to act as a platform for the organization of signaling proteins. We report analyses of synchrotron X-ray powder diffraction patterns recorded from aqueous dispersions of ternary mixtures of sphingomyelin and phosphatidylcholine from egg yolk and cholesterol to investigate how cholesterol distributes between the two phospholipids. lit the absence of cholesterol the two phospholipids are immiscible between 20 and 50 degrees C. Addition of up to 22 mol % cholesterol to equimolar mixtures of the phospholipids results in partition of some sphingomyelin into a phosphatidylcholine phase at 37 degrees C. Increased proportions of cholesterol result in partition of the excess cholesterol into the phosphatidylcholine phase which is in equilibrium with a stoichiometric complex of 1.7:1, sphingomyelin:cholesterol. The molecular order of the complex may explain the basis upon which proteins are assembled within the membrane raft.