In this study, we establish that cholesterol and sphingolipid associated with hepatitis C virus (HCV) particles are important for virion maturation and infectivity. In a recently developed culture system enabling study of the complete life cycle of HCV, mature virions were enriched with cholesterol as assessed by the molar ratio of cholesterol to phospholipid in virion and cell membranes. Depletion of cholesterol from the virus or hydrolysis of virion-associated sphingomyelin almost completely abolished HCV infectivity. Supplementation of cholesterol-depleted virus with exogenous cholesterol enhanced infectivity to a level equivalent to that of the untreated control. Cholesterol-depleted or sphingomyelin-hydrolyzed virus had markedly defective internalization, but no influence on cell attachment was observed. Significant portions of HCV structural proteins partitioned into cellular detergent-resistant, lipid-raft-like membranes. Combined with the observation that inhibitors of the sphingolipid biosynthetic pathway block virion production, but not RNA accumulation, in a JFH-1 isolate, our findings suggest that alteration of the lipid composition of HCV particles might be a useful approach in the design of anti-HCV therapy.