The lipid‐bilayer component of cell membranes is an aqueous bimolecular aggregate characterized by a heterogeneous lateral organization of its molecular constituents. The heterogeneity may be sustained statically as well as dynamically. On the basis of recent experimental and theoretical progress in the study of the physical properties of lipid‐bilayer membranes, it is proposed that the dynamically heterogeneous membrane states are important for membrane functions such as transport of matter across the membrane and enzymatic activity. The heterogeneous membrane states undergo significant (...) structural changes in response to changes in compositional, thermodynamic, and environmental conditions. The diverse effects of a variety of molecular Compounds interacting with membranes, such as Cholesterol and drugs like anaesthetics, may be understood in terms of the ability of these compounds to affect and modulate the dynamic membrane heterogeneity. (shrink)