BACKGROUND In lipid bilayers, cholesterol facilitates the formation of the liquid-ordered phase and enables the formation of laterally ordered structures such as lipid rafts. While these domains have an important role in a variety of cellular processes, the precise atomic-level mechanisms responsible for cholesterol's specific ordering and packing capability have remained unresolved. RESULTS Our atomic-scale molecular dynamics simulations reveal that this ordering and the associated packing effects in membranes largely result from cholesterol's molecular structure, which differentiates cholesterol from other sterols. We find that cholesterol molecules prefer to be located in the second coordination shell, avoiding direct cholesterol-cholesterol contacts, and form a three-fold symmetric arrangement with proximal cholesterol molecules. At larger distances, the lateral three-fold organization is broken by thermal fluctuations. For other sterols having less structural asymmetry, the three-fold arrangement is considerably lost. CONCLUSIONS We conclude that cholesterol molecules act collectively in lipid membranes. This is the main reason why the liquid-ordered phase only emerges for Chol concentrations well above 10 mol% where the collective self-organization of Chol molecules emerges spontaneously. The collective ordering process requires specific molecular-scale features that explain why different sterols have very different membrane ordering properties: the three-fold symmetry in the Chol-Chol organization arises from the cholesterol off-plane methyl groups allowing the identification of raft-promoting sterols from those that do not promote rafts.