To induce toxicity, cholera toxin (CT) must first bind ganglioside G(M1) at the plasma membrane, enter the cell by endocytosis, and then traffic retrograde into the endoplasmic reticulum. We recently proposed that G(M1) provides the sorting motif necessary for retrograde trafficking into the biosynthetic/secretory pathway of host cells, and that such trafficking depends on association with lipid rafts and lipid raft function. To test this idea, we examined whether CT action in human intestinal T84 cells depends on membrane cholesterol. Chelation of cholesterol with 2-hydroxypropyl beta-cyclodextrin or methyl beta-cyclodextrin reversibly inhibited CT-induced chloride secretion and prolonged the time required for CT to enter the cell and induce toxicity. These effects were specific to CT, as identical conditions did not alter the potency or toxicity of anthrax edema toxin that enters the cell by another mechanism. We found that endocytosis and trafficking of CT into the Golgi apparatus depended on membrane cholesterol. Cholesterol depletion also changed the density and specific protein content of CT-associated lipid raft fractions but did not entirely displace the CT-G(M1) complex from these lipid raft microdomains. Taken together these data imply that cholesterol may function to couple the CT-G(M1) complex with raft domains and with other membrane components of the lipid raft required for CT entry into the cell.