Coexisting gel and liquid-crystalline phospholipid phase domains can be observed in synthetic phospholipid vesicles during the transition from one phase to the other and, in vesicles of mixed phospholipids, at intermediate temperatures between the transitions of the different phospholipids. The presence of cholesterol perturbs the dynamic properties of both phases to such an extent as to prevent the detection of coexisting phases. 6-Lauroyl-2-dimethylaminopahthalene (Laurdan) fluorescence offers the unique advantage of well resolvable spectral parameters in the two phospholipid phases that can be used for the detection and quantitation of coexisting gel and liquid-crystalline domains. From Laurdan fluorescence excitation and emission spectra, the generalized polarization spectra and values were calculated. By the generalized polarization phospholipid phase domain coexistence can be detected, and each phase can be quantitated. In the same phospholipid vesicles where without cholesterol domain coexistence can be detected, above 15 mol% and, remarkably, at physiological cholesterol concentrations, > or = 30 mol%, no separate Laurdan fluorescence signals characteristic of distinct domains can be observed. Consequences of our results on the possible size and dynamics of phospholipid phase domains and their biological relevance are discussed.