Membrane fusion is the primary step in the entry of enveloped viruses into the host cell. Membrane composition modulates the membrane fusion by changing the organization dynamics of the fusion proteins, peptides, and membranes. The asymmetric lipid compositions of the viral envelope and the host cell influence the membrane fusion. Cholesterol is an important constituent of mammalian cells and plays a vital role in the entry of several viruses. In our pursuit of developing peptide-based general fusion inhibitors, we have previously shown that a coronin 1-derived peptide, TG-23, inhibited polyethylene glycol-induced fusion between symmetric membranes without cholesterol. In this work, we have studied the effect of TG-23 on the polyethylene glycol-mediated fusion between 1,2-dioleoyl-sn-glycero-3-phosphocholine (DOPC), 1,2-dioleoyl-sn-glycero-3-phosphoethanolamine (DOPE), and 1,2-dioleoyl-sn-glycero-3-phospho-(1'-rac-glycerol) (DOPG) (60/30/10 mol %) and DOPC/DOPE/DOPG/CH (50/30/10/10 mol %) membranes and between DOPC/DOPE/DOPG (60/30/10 mol %) and DOPC/DOPE/DOPG/CH (40/30/10/20 mol %) membranes. Our results demonstrate that the TG-23 peptide inhibited the fusion between membranes containing 0 and 10 mol % cholesterol though the efficacy is less than that of symmetric fusion between membranes devoid of cholesterol, and the inhibitory efficacy becomes negligible in the fusion between membranes containing 0 and 20 mol % cholesterol. Several steady-state and time-resolved fluorescence spectroscopic techniques have been successfully utilized to evaluate the organization, dynamics, and membrane penetration of the TG-23 peptide. Taken together, our results demonstrate that the reduction of the inhibitory effect of TG-23 in asymmetric membrane fusion containing cholesterol of varying concentrations is not due to the altered peptide structure, organization, and dynamics, rather owing to the intrinsic negative curvature-inducing property of cholesterol. Therefore, the membrane composition is an added complexity in the journey of developing peptide-based membrane fusion inhibitors.