Lipid bilayers and monolayers composed of dimyristoylphosphatidic acid (DMPA) and cholesterol were characterized by differential scanning calorimetry and film balance measurements. Increasing cholesterol content decreases the bilayer phase transition temperature and enthalpy in a manner similar to that observed before for other lipid/cholesterol systems. In monomolecular films at the air-water interface cholesterol exhibits the well known condensing effect in the liquid-expanded phase, while the liquid-condensed phase is less affected. As with the bilayer phase transition, the transition temperature and change in area at the liquid-condensed to liquid-expanded phase transition, as measured from isobars at 25 dynes/cm, decreases with increasing cholesterol content. The kinetics of the phase transition of DMPA/cholesterol bilayers were measured using the pressure jump relaxation technique with optical detection. Three relaxation times were observed. The relaxation times and amplitudes pass through maximum values at the transition midpoint. With increasing cholesterol content the maximum values of the relaxation times decrease but not in a linear fashion. The time constants display an intermediate maximum at ca. 10% to 12 mol% cholesterol. This observation is discussed in terms of a possible change in the nature of the phase transition from first-order with phase separation to a continuous second-order transition. The dependence of the relaxation amplitudes on cholesterol content gave evidence for nucleation being the rate limiting step for the transition in this particular system.