The time-resolved fluorescence emission anisotropy of 12-(9-anthroyloxy)stearic acid (12-AS) and 1,6-diphenyl-1,3,5-hexatriene (DPH) have been measured in dipalmitoylphosphatidylcholine liposomes in the presence and absence of 40 mol% cholesterol at temperatures above and below the phase transition temperature (41°C). By using a synchronously-pumped mode-locked frequency-doubled dye laser and single photon counting detection with an excitation response function of 300 picosecond, rotational correlation times down to less than 1 nanosecond could be resolved. Whereas DPH showed only small changes in the limiting anisotropy on the addition of cholesterol, 12-AS showed significant increases in this parameter with the effect being potentiated at higher temperatures. This difference in behaviour has been attributed to a fluorophore-cholesterol interaction that resulted in a change in the fluorophore geometry. Not only do DPH and 12-AS sense different depolarizing rotations due to the different directions of their emission dipoles but also differ in their lipid interactions which alter their limiting anisotropies. The implication is that the comparison of steady-state anisotropy measurements between chemically identical fluorophores in different lipid environments may be complicated by molecular distortions that change the motions to which the steady-state fluorescence parameters will be sensitive.