Cholesterol is solubilized by bile salt and bile salt-lecithin micelles without appreciable alteration in preexisting micellar size or structure. In dilute (approximately 3 gm per dl) model bile, but not in concentrated (approximately 10 gm per dl) systems, supramicellar concentrations of cholesterol are also solubilized in "stable" microdispersions of small lecithin-cholesterol vesicles (approximately 200 to 400 A in radius). Under physical-chemical conditions of physiological importance, the micellar solubilities of cholesterol are influenced by the total lipid concentrations, lecithin-to-bile salt ratio and bile salt species. The hydrophilic-hydrophobic balance of the bile salt monomer also influences the number and composition of precipitate phases coexisting in equilibrium with saturated micelles. When diluted below the critical micellar concentration (more correctly, the intermicellar concentration) of the bile salt species, the systems no longer contain micelles, but cholesterol remains dispersed in unilamellar liposomes that form spontaneously from the mixed micellar concentrations of the biliary lipids.