Cholesterol has evolved to fulfill sophisticated biophysical, cell signalling, and endocrine functions in animal systems. At the cellular level, cholesterol is found in membranes where it increases both bilayer stiffness and impermeability to water and ions. Furthermore, cholesterol is integrated into specialized lipid-protein membrane microdomains with critical topographical and signalling functions. At the organismal level, cholesterol is the precursor of all steroid hormones, including gluco- and mineralo-corticoids, sex hormones, and vitamin D, which regulate carbohydrate, sodium, reproductive, and bone homeostasis, respectively. This sterol is also the immediate precursor of bile acids, which are important for intestinal absorption of dietary lipids as well as energy homeostasis and glucose regulation. Complex mechanisms maintain cholesterol within physiological ranges and the dysregulation of these mechanisms results in embryonic or adult diseases, caused by either excessive or reduced tissue cholesterol levels. The causative role of cholesterol in these conditions has been demonstrated by genetic and pharmacological manipulations in animal models of human disease that are discussed herein. Importantly, the understanding of basic aspects of cholesterol biology has led to the development of high-impact pharmaceutical therapies during the past century. The continuing effort to offer successful treatments for prevalent cholesterol-related diseases, such as atherosclerosis and neurodegenerative disorders, warrants further interdisciplinary research in the coming decades.