Nearly 95% of Alzheimer's disease (AD) occurs sporadically without genetic linkage. Aging, hypertension, high cholesterol content, and diabetes are known nongenomic risk factors of AD. Aggregation of Aβ peptides is an initial event of AD pathogenesis. Aβ peptides are catabolic products of a type I membrane protein called amyloid precursor protein (APP). Aβ40 is the major product, whereas the 2-residue-longer version, Aβ42, induces amyloid plaque formation in the AD brain. Since cholesterol content is one risk factor for sporadic AD, we aimed to explore whether cholesterol in the membrane affects the structure of the APP transmembrane region, thereby modulating the γ-secretase cutting behavior. Here, we synthesized several peptides containing the APP transmembrane region (sequence 693-726, corresponding to the Aβ sequence) with one or two Cys mutations for spin labeling. We performed three electron spin resonance experiments to examine the structural changes of the peptides in liposomes composed of dioleoyl phosphatidylcholine and different cholesterol content. Our results show that cholesterol increases membrane thickness by 10% and peptide length accordingly. We identified that the di-glycine region of Aβ (sequence VGGVV) exhibits the most profound change in response to cholesterol compared with other segments, explaining how the presence of cholesterol affects the γ-secretase cutting site. This study provides spectroscopic evidence showing how cholesterol modulates the structure of the APP transmembrane region in a lipid bilayer.