Pore-forming toxins are widely distributed proteins which form lesions in biological membranes. In this review, bacterial pore-forming toxins are treated as a paradigm and discussed in terms of the structural principles on which they work. Then, a large family of bacterial toxins, the cholesterol-binding toxins, are analyzed in depth to provide an overview of the processes involved in pore formation. The ways in which the cholesterol-binding toxins (cholesterol-dependent cytolysins) interact with membranes and form pores, the structure of the monomeric soluble and oligomeric pore-forming states, and the effects of the toxin on membrane structure are discussed. By surveying the range of work which has been done on cholesterol-binding toxins, a working model is elaborated which reconciles two current, apparently diametrically opposed, models for their mechanism.