Lipid rafts are cholesterol- and sphingolipid-enriched microdomains in cell membranes that regulate phosphorylation cascades originating from membrane-bound proteins. In this study, we tested whether alteration of the cholesterol content of lipid rafts in prostate cancer (PCa) cell membranes affects cell survival mechanisms in vitro and in vivo. Simvastatin, a cholesterol synthesis inhibitor, lowered raft cholesterol content, inhibited Akt1 serine-threonine kinase (protein kinase Balpha)/protein kinase B (Akt/PKB) pathway signaling, and induced apoptosis in caveolin- and PTEN-negative LNCaP PCa cells. Replenishing cell membranes with cholesterol reversed these inhibitory and apoptotic effects. Cholesterol also potentiated Akt activation in normal prostate epithelial cells, which were resistant to the apoptotic effects of simvastatin. Elevation of circulating cholesterol in SCID mice increased the cholesterol content and the extent of protein tyrosine phosphorylation in lipid rafts isolated from LNCaP/sHB xenograft tumors. Cholesterol elevation also promoted tumor growth, increased phosphorylation of Akt, and reduced apoptosis in the xenografts. Our results implicate membrane cholesterol in Akt signaling in both normal and malignant cells and provide evidence that PCa cells can become dependent on a cholesterol-regulated Akt pathway for cell survival.