To maintain proper cellular function, the amount and distribution of cholesterol residing within cellular membranes must be regulated. The principal disorder affecting transport of cholesterol through the late endosomal/lysosomal system and intracellular cholesterol homeostasis is Niemann-Pick type C (NPC) disease. The genes responsible for NPC disease have been identified, and the encoded Niemann-Pick C1 (NPC1) and Niemann-Pick C2 (HE1/NPC2) proteins are currently the subject of intense investigation. This review provides a detailed examination of NPC1 and HE1/NPC2 in regulating the transport of cholesterol through the late endosomal/lysosomal system to other cellular compartments responsible for maintaining intracellular cholesterol homeostasis, and how defective function of these proteins may be responsible for the pathophysiology associated with NPC disease.