Niemann-Pick C1-like 1 (NPC1L1) is a polytopic transmembrane protein that plays a critical role in cholesterol absorption. Ezetimibe, a hypocholesterolemic drug, has been reported to bind NPC1L1 and block cholesterol absorption. However, the molecular mechanism of NPC1L1-mediated cholesterol uptake and how ezetimibe inhibits this process are poorly defined. Here we find that cholesterol specifically promotes the internalization of NPC1L1 and that this process requires microfilaments and the clathrin/AP2 complex. Blocking NPC1L1 endocytosis dramatically decreases cholesterol internalization, indicating that NPC1L1 mediates cholesterol uptake via its vesicular endocytosis. Ezetimibe prevents NPC1L1 from incorporating into clathrin-coated vesicles and thus inhibits cholesterol uptake. Together, our data suggest a model wherein cholesterol is internalized into cells with NPC1L1 through clathrin/AP2-mediated endocytosis and ezetimibe inhibits cholesterol absorption by blocking the internalization of NPC1L1.