Ursodeoxycholate is used to treat primary biliary cirrhosis and is incorporated into hepatocyte plasma membranes. Its steroid nucleus binds to the apolar domain of the membrane, in a similar position to cholesterol. Therefore the question arises whether ursodeoxycholate has a similar effect on membrane structure and stability as cholesterol. Using differential scanning calorimetry the thermotropic behavior of egg phosphatidylcholine and dimyristoylphosphatidylcholine were studied after incubation with cholesterol or ursodeoxycholate. Large unilamellar vesicles were prepared with cholesterol contents of 0-50%. Following incubation of these vesicles with different amounts of ursodeoxycholate, vesicle stability in a gravitational field was investigated by measuring the phospholipid and cholesterol release. Vesicle size was studied by laser light scattering after incubation with cheno- and ursodeoxycholate, and the release of entrapped carboxyfluorescein was measured by means of fluorescence spectroscopy. Increasing cholesterol diminished the enthalpy of the phase transition in the membrane. Ursodeoxycholate decreased the enthalpy of the phase transition at even lower concentrations. Lipid release from vesicles in a high gravitational field diminished with increasing cholesterol content of the vesicles. Ursodeoxycholate had a comparable effect, which increased as the cholesterol content of the vesicles was decreased. Chenodeoxycholate damaged vesicles, whereas ursodeoxycholate did not. Cholesterol and ursodeoxycholate (below its critical micellar concentration) decreased the carboxyfluorescein release from vesicles induced by chenodeoxycholate. Thus like cholesterol, ursodeoxycholate is incorporated into phospholipid model membranes and reduces the change in enthalpy of the gel to liquid-crystalline phase transition. Like cholesterol ursodeoxycholate also maintains membrane stability and prevents membrane damage induced by mechanical and chemical stress.