We tested the hypothesis that certain membrane-intercalating agents increase the chemical activity of cholesterol by displacing it from its low activity association with phospholipids. Octanol, 1,2-dioctanoyl-sn-glycerol (a diglyceride), and N-hexanoyl-D-erythrosphingosine (a ceramide) were shown to increase both the rate of transfer and the extent of equilibrium partition of human red blood cell cholesterol to methyl-beta-cyclodextrin. These agents also promoted the interaction of the sterol with two cholesterol-specific probes, cholesterol oxidase and saponin. Expanding the pool of bilayer phospholipids with lysophosphatides countered these effects. The three intercalators also protected the red cells against lysis by cholesterol depletion as if substituting for the extracted sterol. As is the case for excess plasma membrane cholesterol, treating human fibroblasts with octanol, diglyceride, or ceramide stimulated the rapid inactivation of their hydroxymethylglutaryl-CoA reductase, presumably through an increase in the pool of endoplasmic reticulum cholesterol. These data supported the stated hypothesis and point to competition between cholesterol and endogenous and exogenous intercalators for association with membrane phospholipids. We also describe simple screens using red cells in a microtiter well format to identify intercalating agents that increase or decrease the activity of membrane cholesterol.