Cholesterol crystallization is a poorly understood obligatory step in cholesterol gallstone formation. We have studied early stages of cholesterol crystallization in a model bile system composed of an aqueous solution of taurocholate/cholesterol/lecithin (97.5/1.7/0.8 moles%). Nucleation of cholesterol crystals was induced by dilution of a micellar solution to achieve supersaturation. Following spontaneous vesicle formation, thin filamentous structures were observed by electron and light microscopy. The filaments were composed of a core of >95% cholesterol and a surface layer of <5% lecithin, which was preferentially enriched in hydrophobic molecular species. The filaments had a buoyant density of 1.03 g/ml, and revealed an x-ray diffraction pattern compatible with crystalline cholesterol monohydrate with an additional Bragg reflection at 4.9 Angstrom suggesting a polymorph of cholesterol monohydrate, or early anhydrous crystallization. The filaments grew and transformed via intermediate spiral, helical and tubular microstructures to become classical plate-like cholesterol monohydrate crystals with a density of 1.045g/ml. The crystallization sequence was markedly influenced by substituting the natural lecithin species with unphysiologic synthetic species, and by incorporation of hydrophobic sterols into the model bile. These findings suggest that crystalline cholesterol in bile may not be completely mature or hydrated initially, but following nucleation undergoes a series of transformations to become thermodynamically stable monohydrate plates. The crystallization process is influenced and possibly controlled by a surface layer of biliary lecithins adsorbed by hydrophobic interactions.