The stability of cnidarian-dinoflagellate endosymbioses is dependent upon communication between the host gastrodermal cell and the symbionts housed within it. Although the molecular mechanisms remain to be elucidated, existing evidence suggests that the establishment of these endosymbioses may involve the sorting of membrane proteins. The present study examined the role of host gastrodermal membranes in regulating symbiont (genus Symbiodinium) photosynthesis in the stony coral Euphyllia glabrescens. In comparison with the photosynthetic behavior of Symbiodinium in culture, the Symbiodinium populations within isolated symbiotic gastrodermal cells (SGCs) exhibited a significant degree of photo-inhibition, as determined by a decrease in the photochemical efficiency of photosystem II (F (v)/F (m)). This photo-inhibition coincided with increases in plasma membrane perturbation and oxidative activity in the SGCs. Membrane trafficking in SGCs was examined using the metabolism of a fluorescent lipid analog, N-[5-(5,7-dimethyl boron dipyrromethene difluoride)-1-pentanoyl]-D-erythro-Sphingosylphosphoryl-choline (BODIPY-Sphingomyelin or BODIPY-SM). Light irradiation altered both membrane distribution and trafficking of BODIPY-SM, resulting in metabolic changes. Cholesterol depletion of the SGC plasma membranes by methyl-β-cyclodextrin retarded BODIPY-SM degradation and further augmented Symbiodinium photo-inhibition. These results indicate that Symbiodinium photo-inhibition may be related to perturbation of the host gastrodermal membrane, providing evidence for the pivotal role of host membrane trafficking in the regulation of this environmentally important coral-dinoflagellate endosymbiosis.