X-ray diffraction patterns from human arterial specimens containing atherosclerotic fatty streak lesions exhibited a single sharp reflection, corresponding to a structural spacing of about 35 A. Specimens without lesions did not. When specimens with fatty streaks were heated, an order-to-disorder phase transition was revealed by the disappearance of the sharp reflection. The transition was thermally reversible and its temperature varied from aorta to aorta over a range from 28 degrees to 42 degrees C. Since cholesteryl ester droplets are a major component of fatty streaks, comparison studies were made of the diffraction behavior from pure cholesteryl esters. We found that the diffraction patterns of the fatty streak material could be accounted for by the organization of the cholesteryl esters into a liquid-crystalline smectic phase that melts from the smectic to a less ordered phase upon heating. When combined with the conclusions of others from polarized light microscopy, our study shows that a droplet in the smectic phase has well-defined concentric layers of lipid molecules. In each layer, the long axes of the molecules have a net radial orientation with respect to the droplet, but the side-to-side organization is disordered. We suggest that the accessibility of portions of the lipids for specific binding to enzymes or transport proteins may be restricted when they are in the smectic state, and that exchange of lipids with surrounding membranes or other potential binding sites may likewise be inhibited. The restriction in the smectic phase should be greater than in the less ordered phases that exist at higher temperatures.