The cholesterol (Chol) aided micelle to vesicle transition of the cationic (14-4-14) gemini surfactant (GS) (tetramethylene-1,4-bis(dimethyltetradecylammonium bromide)) has been investigated employing spectrophotometry (visible and fluorescence), dynamic light scattering (DLS) and high resolution transmission electron microscopy (HRTEM) at different R (R = [Chol]/[GS]) values. Turbidity of the mixed solutions gradually increased with increasing R, and was highest at R = 1. There were hypsochromic spectral shifts with varied R, supporting transformation of micelles to vesicles, corroborated by DLS measurements. The vesicle sizes ranged between ∼160–240 nm. The steady state fluorescence anisotropy measurements suggested Chol induced anisotropy to the formed vesicles; they were structurally incongruent. The vesicle phase was found to be stable in the studied temperature range of 15–60 °C. The increased rotational relaxation time of the probe molecule C-153 (coumarin 153) supported enhanced rigidity of the local environment of the vesicles with an increasing proportion of Chol in the mixture.