When cytochrome b5 is added to large unilamellar vesicles (LUVs) of 1-palmitoyl-2-oleoylphosphatidylcholine (POPC), it binds predominantly in a 'loose,' or transferable form. Prolonged incubation of 30 degrees C leads to insertion in the physiological 'tight,' nontransferable form, with a halftime for the loose --> tight conversion of approx. 9 days. In this study, the effect of cholesterol on the rate of tight insertion was determined. Tight binding was assayed by depleting the LUVs of loose cytochrome b5 with an excess of SUV acceptors and then separating the liposome populations by gel-filtration or velocity sedimentation. Incorporation of cholesterol into the LUVs was found to markedly increase the rate of tight insertion, even though cholesterol decreases the equilibrium binding constant and saturation level of protein binding. The effect is not a continuously increasing function of cholesterol content, but attains a maximum at 20-25% mol%, where the rate enhancement is approx. 10-fold over baseline. At higher cholesterol levels, the rate decreases, returning to baseline at 40 mol% cholesterol. These observations are highly unusual in that cholesterol generally decreases the membrane binding affinity and the permeability of solutes, and does so as a monotonic function of cholesterol concentration (above the liquid-crystalline phase transition of the phospholipids). It is suggested that tight insertion is enhanced by lipid-protein packing mismatches and by bilayer fluidity; the former increases monotonically with increasing cholesterol whereas the latter decreases monotonically. At 20-25 mol% cholesterol the optimum balance of these physical properties is obtained for tight insertion.