The protective properties of trehalose on cholesterol-containing lipid dipalmitoylphosphatidylcholine (DPPC) bilayers are studied through molecular simulations. The ability of the disaccharide to interact with the phospholipid headgroups and stabilize the membrane persists even at high cholesterol concentrations and restricts some of the changes to the structure that would otherwise be imposed by cholesterol molecules. Predictions of bilayer properties such as area per lipid, tail ordering, and chain conformation support the notion that the disaccharide decreases the main melting transition in these multicomponent model membranes, which correspond more closely to common biological systems than pure bilayers. Molecular simulations indicate that the membrane dynamics are slowed considerably by the presence of trehalose, indicating that high sugar concentrations would serve to avert possible phase separations that could arise in mixed phospholipid systems. Various time correlation functions suggest that the character of the modifications in lipid dynamics induced by trehalose and cholesterol is different in the hydrophilic and hydrophobic regions of the membrane.