The principles of organization and functioning of cellular membranes are currently not well understood. The raft hypothesis suggests the existence of domains or rafts in cell membranes, which behave as protein and lipid platforms. They have a functional role in important cellular processes, like protein sorting or cell signaling, among others. Theoretical work suggests that the interfacial energy at the domain edge, also known as line tension, is a key parameter determining the distribution of domain sizes, but there is little evidence of how line tension affects membrane organization. We have investigated the effects of the line tension on the formation and stability of liquid ordered domains in model lipid bilayers with raft-like composition by means of time-lapse confocal microscopy coupled to atomic force microscopy. We varied the hydrophobic mismatch between the two phases, and consequently the line tension, by modifying the thickness of the disordered phase with phosphatidylcholines of different acyl chain length. The temperature of domain formation, the dynamics of domain growth, and the distribution of domain sizes depend strongly on the thickness difference between the domains and the surrounding membrane, which is related to line tension. When considering line tension calculated from a theoretical model, our results revealed a linear increase of the temperature of domain formation and domain growth rate with line tension. Domain budding was also shown to depend on height mismatch. Our experiments contribute significantly to our knowledge of the physical-chemical parameters that control membrane organization. Importantly, the general trends observed can be extended to cellular membranes.