CD44 is a cell surface adhesion molecule for hyaluronan and is implicated in tumor invasion and metastasis. Proteolytic cleavage of CD44 plays a critical role in the migration of tumor cells and is regulated by factors present in the tumor microenvironment, such as hyaluronan oligosaccharides and epidermal growth factor. However, molecular mechanisms underlying the proteolytic cleavage on membranes remain poorly understood. In this study, we demonstrated that cholesterol depletion with methyl-β-cyclodextrin, which disintegrates membrane lipid rafts, enhances CD44 shedding mediated by a disintegrin and metalloproteinase 10 (ADAM10) and that cholesterol depletion disorders CD44 localization to the lipid raft. We also evaluated the effect of long term cholesterol reduction using a statin agent and demonstrated that statin enhances CD44 shedding and suppresses tumor cell migration on a hyaluronan-coated substrate. Our results indicate that membrane lipid organization regulates CD44 shedding and propose a possible molecular mechanism by which cholesterol reduction might be effective for preventing and treating the progression of malignant tumors.