The motion of the cholestane spin label in oriented lecithin-cholesterol multibilayers is described in terms of a rotational diffusion about the long molecular axis with diffusion coefficient D parrell and a restricted random librational motion about axes perpendicular to the long axis with diffusion coefficient D1. The diffusion coefficients have been determined from the angular dependence of the ESR line shape at various temperatures and cholesterol contents. The temperature dependence of D parrell and D1 clearly shows the transition from the gel to liquid crystalline phase. Increasing amounts of cholesterol reduce the transition temperature. A strong reduction is found from o to 10 mole % cholesterol. At 50 mole % no longer a sharp transition is observed. In the temperature range from 40 to 80 degrees C the range of D is about 10 times larger than the range of D parrell, indicating a high activation energy for the librational motion arising from a strong hindrance by interaction with surrounding molecules. Cholesterol contents up to 10-20 mole % give an increase of D parrell and D1, arising from strong decrease of the transition temperature in this range. Above 10-20 mole % a reduction of D parrell and D1 is found. However, the effect of cholesterol is much stronger on D1 than on D parrell. In the liquid crystalline phase at about 60 degrees C the effect of cholesterol on D parrell is even negligible, while D1 strongly changes. This indicates that in the liquid crystalline phase only the librational motion is influenced by cholesterol, due to a denser packing of the molecules in the bilayer.