Pulmonary surfactant forms a monolayer of lipids and proteins at the alveolar air/liquid interface. Although cholesterol is a natural component of surfactant, its function in surface dynamics is unclear. To further elucidate the role of cholesterol in surfactant, we used a captive bubble surfactometer (CBS) to measure surface activity of spread films containing dipalmitoylphosphatidylcholine/1-palmitoyl-2-oleoylphosphatidylcholine/1-palmitoyl-2-oleoylphosphatidylglycerol (DPPC/POPC/POPG, 50/30/20 molar percentages), surfactant protein B (SP-B, 0.75 mol %), and/or surfactant protein C (SP-C, 3 mol %) with up to 20 mol % cholesterol. A cholesterol concentration of 10 mol % was optimal for reaching and maintaining low surface tensions in SP-B-containing films but led to an increase in maximum surface tension in films containing SP-C. No effect of cholesterol on surface activity was found in films containing both SP-B and SP-C. Atomic force microscopy (AFM) was used, for the first time, to visualize the effect of cholesterol on topography of SP-B- and/or SP-C-containing films compressed to a surface tension of 22 mN/m. The protrusions found in the presence of cholesterol were homogeneously dispersed over the film, whereas in the absence of cholesterol the protrusions tended to be more clustered into network structures. A more homogeneous dispersion of surfactant lipid components may facilitate lipid insertion into the surfactant monolayer. Our data provide additional evidence that natural surfactant, containing SP-B and SP-C, is superior to surfactants lacking one of the components, and furthermore, this raises the possibility that the cholesterol found in surfactant of warm-blooded mammals does not have a function in surface activity.