Dispersions (50 wt% in water) of sphingomyelin/cholesteryl palmitate (95 : 5 mol%) have been studied by 2H- and 31P-NMR spectroscopy between 25 and 60 degrees C. The deuterated esters, cholesteryl palmitate-d31 and cholesteryl palmitate-16, 16, 16-d3, were used for 2H-NMR studies. Of the 5 mol% cholesteryl palmitate added, 1.5 mol% was found to incorporate in the sphingomyelin and this amount remained constant throughout the temperature range studied. The remainder of the cholesteryl palmitate was present as regions of solid. At temperatures above the gel-to-liquid crystalline phase transition of sphingomyelin the NMR spectra indicate that a fraction of the cholesteryl palmitate and sphingomyelin is undergoing rapid isotropic motions. This fraction, which increases with increasing temperature above the phase transition, is probably composed of small bilayer structures. When 50 mol% cholesterol (relative to sphingomyelin) was added to the sphingomyelin/cholesteryl palmitate dispersion, the isotropic component in the NMR spectral was no longer present, the gel-to-liquid crystalline phase transition was removed, and the incorporation of ester in the membrane decreased by more than an order of magnitude.