The condensing effect of cholesterol in dioleoylphosphatidylcholine (DOPC) lipid bilayers was systematically investigated via atomistic molecular dynamics (MD) simulation. Fourteen independent 200 ns simulations, spanning the entire range of cholesterol mole fraction (xc) in DOPC bilayers (i.e., from xc = 0 to 0.66), were performed at 323 K. The molecular areas occupied by DOPC and cholesterol at different distances from the bilayer center were analyzed using a slicing method based on the VDW radii of atoms. Curiously, while the average area per lipid and the cholesterol tilt angle, with respect to the bilayer normal, both show monotonic decreases as xc increases, the average bilayer height shows a significant decrease for xc > 0.35, following an initial increase. The calculated partial-specific areas of lipids clearly show the condensing effect of cholesterol. The VDW areal analysis showed that the condensing effect is limited only to the cholesterol sterol ring region, where the acyl chains of DOPC are severely compressed by cholesterol. As xc increases, the headgroups of DOPC gradually expand along the bilayer-aqueous interface to occupy more lateral area. Thus, it confirmed a key prediction of the umbrella model. At high cholesterol mole fractions, the calculated area per DOPC and area per cholesterol using some existing methods showed an inconsistent result: both increase while the overall area per lipid decreases. The inconsistency stems from the problematic assumption that cholesterol and DOPC have cylindrical shape and the same height. Our results showed that the total area of a PC/cholesterol bilayer is primarily determined by the molecular packing in the cholesterol sterol ring region. An alternative analysis of area per molecule within this region is proposed, which takes into account the cholesterol tilt angle and the practical incompressibility of cholesterol sterol rings. The new calculation shows that the majority of the area lost due to the cholesterol condensing effect is taken from PC molecules.