Cholesterol is essential for proper function and regulation of eukaryotic membranes, and significant amounts of metabolic energy are dedicated to controlling cellular cholesterol levels. Oxidation products of cholesterol, the oxysterols, are enzymatically produced molecules that play a major role in mediating cholesterol homeostasis through mechanisms which have not yet been fully elucidated. Certain oxysterols are known to have direct effects on membrane permeability and structure, effects that are strikingly different from that of cholesterol. We use molecular dynamics simulations of these oxysterols in 1-palmitoyl 2-oleoyl phosphatidylcholine (POPC) bilayers to explain the structural origins for the differing effects of cholesterol and 25-hydroxycholesterol on bilayer properties. In particular, we demonstrate that the source for these differing perturbations is the much wider range of molecular orientations accessible to 25-hydroxycholesterol when compared to cholesterol. This study shows that direct membrane perturbation by side-chain oxysterols is significant and suggests that these membrane perturbations may play a role in the oxysterol regulation of cholesterol homeostasis.