Trichogin GA IV is a membrane-active lipopeptide, the antibiotic activity of which was proposed to be based on its capability to induce leakage due to formation of pores into the bacterial cell membrane. However, less attention has been paid to its biological selectivity, i.e., discrimination between bacterial versus cholesterol containing (mammalian) membranes. This is the reason which motivated us to study the role of cholesterol on penetration of the peptide into the membrane and formation of water channels. The ESEEM technique was used to measure the modulation amplitudes for TOAC spin-labeled trichogin GA IV peptide analogues in hydrated membranes of phosphatidylcholine (PC) lipid in the presence of 50 mol % cholesterol-d(7). From the interaction between the nitroxide spin-label and the nearby located deeply membrane inserted deuterons, the N-terminus was found to be positioned at the core of the membrane. Separately, ESEEM measurements for the FTOAC-8 labeled peptide, but in D2O hydrated cholesterol/PC membranes, provide strong evidence for the polar C-terminus situated near the membrane surface. The apparently too high modulation amplitude measured for the buried FTOAC-1 label is likely attributed to the presence of peptide associated water. In cholesterol depleted membrane, however, the long axes of the helical molecules are found oriented parallel to the membrane surface even at high peptide concentration. Continuous wave EPR spectroscopy indicates that, for cholesterol containing membrane, peptide insertion is accompanied by self-aggregation of parallelly aligned transmembrane peptide molecules, while for cholesterol lacking membranes they are monomolecularly distributed. Thus, cholesterol tends to stabilize the transmembrane peptide aggregate.