Cholesterol is essential for membrane synthesis; however, the mechanisms that link cellular lipid metabolism to proliferation are incompletely understood. We demonstrate here that cellular cholesterol levels in dividing T cells are maintained in part through reciprocal regulation of the LXR and SREBP transcriptional programs. T cell activation triggers induction of the oxysterol-metabolizing enzyme SULT2B1, consequent suppression of the LXR pathway for cholesterol transport, and promotion of the SREBP pathway for cholesterol synthesis. Ligation of LXR during T cell activation inhibits mitogen-driven expansion, whereas loss of LXRbeta confers a proliferative advantage. Inactivation of the sterol transporter ABCG1 uncouples LXR signaling from proliferation, directly linking sterol homeostasis to the antiproliferative action of LXR. Mice lacking LXRbeta exhibit lymphoid hyperplasia and enhanced responses to antigenic challenge, indicating that proper regulation of LXR-dependent sterol metabolism is important for immune responses. These results implicate LXR signaling in a metabolic checkpoint that modulates cell proliferation and immunity.