Transforming growth factor-beta (TGF-beta) responsiveness in cultured cells can be modulated by TGF-beta partitioning between lipid raft/caveolae- and clathrin-mediated endocytosis pathways. The TbetaR-II/TbetaR-I binding ratio of TGF-beta on the cell surface has recently been found to be a signal that controls TGF-beta partitioning between these pathways. Since cholesterol is a structural component in lipid rafts/caveolae, we have studied the effects of cholesterol on TGF-beta binding to TGF-beta receptors and TGF-beta responsiveness in cultured cells and in animals. Here we demonstrate that treatment with cholesterol, alone or complexed in lipoproteins, decreases the TbetaR-II/TbetaR-I binding ratio of TGF-beta while treatment with cholesterol-lowering or cholesterol-depleting agents increases the TbetaR-II/TbetaR-I binding ratio of TGF-beta in all cell types studied. Among cholesterol derivatives and analogs examined, cholesterol is the most potent agent for decreasing the TbetaR-II/TbetaR-I binding ratio of TGF-beta. Cholesterol treatment increases accumulation of the TGF-beta receptors in lipid rafts/caveolae as determined by sucrose density gradient ultracentrifugation analysis of cell lysates. Cholesterol/LDL suppresses TGF-beta responsiveness and statins/beta-CD enhances it, as measured by the levels of P-Smad2 and PAI-1 expression in cells stimulated with TGF-beta. Furthermore, the cholesterol effects observed in cultured cells are also found in the aortic endothelium of atherosclerotic ApoE-null mice fed a high cholesterol diet. These results indicate that high plasma cholesterol levels may contribute to the pathogenesis of certain diseases (e.g., atherosclerosis) by suppressing TGF-beta responsiveness.