The interaction of cholesterol with ceramides containing α-hydroxy fatty acyl chains (hydroxyceramides) has been studies as a foundation for characterizing the lipid bilayers of the stratum corneum. A relatively large quantity of cerebrosides was obtained from bovine brain and converted to ceramides through removal of the carbohydrate side chain. The ceramides were separated based on the absence or presence of hydroxy fatty acyl chains. The lyophilized hydroxyceramides showed a broad melting region at 92°C. Hydroxyceramides dispersed in water produced a relatively narrow, thermotropic transition at 75°C. The effect of cholesterol on this thermotropic phase transition of hydroxyceramides was determined by differential scanning calorimetry. With respect to the main transition, cholesterol caused a broadening of the phase transition at relatively low levels as well as a decrease in the peak transition temperature. The presence of cholesterol at levels in excess of 7 wt% gave rise to an additional low-temperature transition at 55°C. Upon immediate rescanning, this transition was exothermic, but with increasing incubation time the area under the excess heat capacity curve as a function of temperature became smaller. After two days or more, the transition observed was endothermic. At cholesterol levels between 40 and 50 wt%, multiple peaks were observed. From comparisons with related systems, the cooperative thermal transitions of hydroxyceramides with cholesterol are suggested to result from changes in hydrogen bonding or be due to phase separation. The composition of isolated brain ceramides is being compared with that reported for the stratum corneum.