The problem of lateral diffusion in inhomogeneous membranes is illustrated by a theoretical calculation of the lateral diffusion of a fluorescent lipid probe in binary mixtures of phosphatidylcholine and cholesterol under conditions of temperature and composition such that this lipid mixture consists of alternating parallel domains of fluid and solid lipid, having separations that are small compared with the distance scale employed in photobleaching experiments. The theoretical calculations clearly illustrate how inhomogeneities in membrane composition affecting the lateral motion of membrane components on a small (10-100 nm) distance scale can give complex diffusive responses in experiments such as fluorescence photobleaching that employ comparatively macroscopic distances (10-100 micrometers) for the measurement of diffusive recovery. The theoretical calculations exhibit the unusual dependence of the apparent lateral diffusion coefficient of a fluorescent lipid probe on lipid composition in binary mixtures of cholesterol and phosphatidylcholines as reported by Rubenstein et al. (1979, Proc. Natl. Acad. Sci. U.S.A., 76:15-18).