Clearance of synaptically released dopamine is regulated by the plasmalemmal dopamine transporter (DAT), an integral membrane protein that resides within a complex lipid milieu. Here we demonstrate that cholesterol, a major component of the lipid bilayer, can modulate the conformation of DAT and alter cocaine binding to DAT. In striatal synaptosomes and transfected cells, DAT was in cholesterol-rich membrane fractions after mild detergent extraction. After increasing the membrane cholesterol content by treatment of water-soluble cholesterol (cholesterol mixed with methyl-β-cyclodextrin), we observed an increase in DAT binding B(max) values for cocaine analogs [(3)H]WIN35428 and [(125)I]RTI-55, but similar levels of DAT proteins on the cell surface were shown by surface biotinylation assays. Membrane cholesterol addition also markedly enhanced the accessibility of cysteine sulfhydryl moieties in DAT as probed by a membrane-impermeable maleimide-biotin conjugate. We identified cysteine 306, a juxtamembrane residue on transmembrane domain 6 (TM6) of DAT, as the intrinsic residue exhibiting enhanced reactivity. Similar effects on DAT cysteine accessibility and radioligand binding were observed with addition of zinc, a reagent known to promote the outward facing conformation of DAT. Using substituted cysteine mutants on various positions likely to be extracellular, we identified additional residues located on TM1, TM6, TM7, and TM12 of DAT that are sensitive to alterations in the membrane cholesterol content. Our findings in transfected cells and native tissues support the hypothesis that DAT adopts an outward facing conformation in a cholesterol-rich membrane environment, suggesting a novel modulatory role of the surrounding membrane lipid milieu on DAT function.