Deuterium nuclear magnetic resonance quadrupole splittings Dq and the related acyl chain segmental order parameters Smol have been determined for perdeuteriostearic acid intercalated as a molecular probe in the lamellar liquid crystalline phase of egg yolk phosphatidylcholine-cholesterol-water mixtures. The 2H NMR data show that cholesterol induces a high degree of order in the acyl chains of the phospholipid while maintaining the general profile of high order near the head group and relatively low order in the middle of the bilayer. This results in a pronounced thickening of the bilayer and concomitant decrease in the average molecular area of the fatty acyl chains. The giometrical changes in the bilayer due to cholesterol are discussed in terms of trans-gauche isomerization in the fatty acyl chains. The picture of the condensing effect revealed by 2H NMR is consistent with that from previous X-ray diffraction experiments. No evidence for a specific complex between cholesterol and phosphatidylcholine is apparent. The condensing effect of cholesterol is attributed to interaction between the fatty acyl chains and the rigid steroid nucleus, and to solvation of the 3beta-hydroxyl group at the aqueous interface.