Using steady-state fluorescence polarization measurements, an isothermal pressure-induced phase transition was observed in dimyristoyl-L-alpha-phosphatidylcholine multilamellar vesicles containing perylene. The temperature-to-pressure equivalence, dT/dP, estimated from the phase transition pressure, P1/2, is about 22 K X kbar-1, which is comparable to values determined from diphenylhexatriene polarization (Chong, P.L.-G. and Weber, G. (1983) Biochemistry 22, 5544-5550). In addition, we have employed a new method, introduced in this paper, to calculate the rate of in-plane rotation (Rip) and the rate of out-of-plane rotation (Rop) of perylene in lipid bilayers. The effects of pressure and cholesterol on the rotational rates of perylene in two lipid bilayer systems have been examined. They are 1-palmitoyl-2-oleoyl-L-alpha-phosphatidylcholine (POPC) multilamellar vesicles (MLV) and 50 mol% cholesterol in POPC (MLV). Rop is smaller than Rip due to the fact that the out-of-plane rotation requires a larger volume change than the in-plane rotation. Cholesterol seems not to affect Rop significantly, but pressure causes a decrease in Rop by about a factor of three. In contrast, the effects of pressure and cholesterol on Rip are less straightforward. At 1 atm cholesterol increases Rip by a factor of about two. Similarly, in the absence of cholesterol 1.5 kbar pressure essentially triples Rip. However, if both cholesterol is added and pressure is applied, Rip decreases sharply. The possible interactions between cholesterol and perylene are discussed.