Relationships between membrane lipid composition and physiological properties, particularly intracellular potassium levels, have been studied at 37 degrees C in Mycoplasma mycoides var. Capri (PG3). Native organisms grown on medium supplemented with either oleic acid plus palmitic acid or elaidic acid have identical growth characteristics, acidification properties and intracellular K content. On the other hand, when the cholesterol normally present in the membrane (20--25% of total lipids) is reduced to less than 2%, we observe: (1) the intracellular K content decreases (20 microgram K/mg cell protein instead of 40) and is independent of the phase of growth; (2) K passive permeability is drastically increased but K distribution remains in equilibrium with the transmembrane potential (delta psi); (3) organisms stop growing at pH 6.5 (instead of 5.2) and acidification is reduced by 40%, suggesting a large increase in H+ permeability, and (4) intracellular Na contents rise from 3 to 9 microgram Na/mg cell protein. Replenishing cholesterol in membranes of depleted cells results in a recovery of the high intracellular K level (35--40 microgram K/mg cell protein) and acidification properties. It is suggested that cholesterol affects the cation content via the increase in proton permeability which in turn controls the value of the delta psi responsible for the value of intracellular K equilibrium. Changes in K passive permeability, although related to the amount of cholesterol present in the plasma membrane, are probably not involved in the control of the intracellular K level.