Cholesterol has a large effect on the binding of glucagon to dimyristoylphosphatidylcholine (DMPC) and to dipalmitoylphosphatidylcholine (DPPC). At cholesterol concentrations of 20 mol% or greater there is virtually no interaction of glucagon with phospholipid. Glucagon can, however, solubilize DMPC or DPPC with 10% cholesterol. In the case of DPPC the solubilized lipid is depleted of cholesterol relative to the starting material. These results suggest that glucagon excludes cholesterol from its surroundings.It is shown from solubility, light scattering, and glucagon fluorescence measurements that the glucagon–DMPC complex containing 10% cholesterol is stable only in the region of the phase transition temperature. Scatchard analysis of lipid binding to glucagon indicates a decrease in the amount of bound lipid below 22 °C or above 24 °C. The effect of the phase transition on the interaction of glucagon with lipids is compared with that found for other membrane proteins. Several aspects of the effect of cholesterol on glucagon–lipid interactions are analogous to effects which have been observed with serum apolipoproteins.