Cholesterol and its metabolic derivatives have important biological functions and are crucial in tumor initiation, progression, and treatment. Cholesterol maintains the physical properties of cellular membranes and is pivotal in cell signal transduction. Cholesterol metabolism includes both de novo synthesis and uptake from extracellular sources such as low-density lipoprotein (LDL) and high-density lipoprotein (HDL). This review explores both aspects to provide a comprehensive understanding of their roles in cancer. Cholesterol metabolism is involved in bile acid production and steroid hormone biosynthesis and is closely linked to the reprogramming of endogenous and exogenous cellular signals within the tumor microenvironment. These signals are intricately associated with key biological processes such as tumor cell proliferation, survival, invasion, and metastasis. Evidence suggests that regulating cholesterol metabolism may offer therapeutic benefits by inhibiting tumor growth, remodeling the immune microenvironment, and enhancing antitumor immune responses. This review summarizes the role of cholesterol metabolism in tumor biology and discusses the application of statins and other cholesterol metabolism inhibitors in cancer therapy, aiming to provide novel insights for the development of antitumor drugs targeting cholesterol metabolism and for advances in cancer diagnosis and treatment.