Nematode sterol-binding protein 1 (NSBP-1) is a homolog of nucleosome assembly protein 1 in mammals that is expressed widely in Caenorhabditis elegans. NSBP-1 mutants are biologically lethal, demonstrating the significance of the gene in growth and development. We investigated how cholesterol influences the insulin signaling pathway through this novel sterol-binding protein in C. elegans. Here we report that NSBP-1 influences many biological processes mediated by insulin signaling, such as longevity, dauer formation, fat storage, and resistance to oxidative stress. We found that NSBP-1 is phosphorylated by AKT-1 downstream of insulin signaling. In the absence of insulin signaling, NSBP-1 is translocated to the nucleus and binds to DAF-16, a FOXO transcription factor, in a cholesterol-dependent manner. Moreover, NSBP-1 and DAF-16 regulate a common set of genes that can directly modulate fat storage, longevity, and resistance to stress. Together, our results present a new steroid-binding molecule that can connect sterol signaling to insulin signaling through direct interaction with FOXO.