Disruption of the cellular membrane by the amyloidogenic peptide, islet amyloid polypeptide (IAPP), has been considered as one of the mechanisms of β-cell death during type 2 diabetes. The N-terminal region (residues 1-19) of the human version of IAPP is suggested to be primarily responsible for the membrane-disrupting effect of the full-length hIAPP peptide. However, the detailed assembly mode of hIAPP1-19 with membrane remains unclear. To gain insight into the interactions of hIAPP1-19 oligomer with the model membrane, we have employed coarse-grained molecular dynamics self-assembly simulations to study the aggregation of hIAPP1-19 fragments in the binary lipid made of zwitterionic dipalmitoylphosphatidylcholine (DPPC) and anionic dipalmitoylphosphatidylserine (DPPS) in the presence and absence of different levels of cholesterol content. The membrane-destabilizing effect of hIAPP1-19 is found to be modulated by the presence of cholesterol. In the absence of cholesterol, hIAPP1-19 aggregates prefer to locate inside the bilayer, forming pore-like assemblies. While in the presence of cholesterol molecules, the lipid bilayer becomes more ordered and stiff, and the hIAPP1-19 aggregates are dominantly positioned at the bilayer-water interface. The action of cholesterol may suggest a possible way to maintain the membrane integrity by small molecule interference.