Adiponectin is an adipokine that can suppress the proliferation of various human carcinoma cells. Although its anti-tumor activities have been suggested by many clinical investigations and animal studies, the underlying mechanisms are not fully characterized. In MMTV-polyomavirus middle T antigen (MMTV-PyVT) transgenic mice models, reduced- or complete loss-of-adiponectin expression promotes mammary tumor development. The present study demonstrated that while tumor development in control MMTV-PyVT mice is associated with a progressively decreased circulating cholesterol concentration, adiponectin deficient MMTV-PyVT mice showed significantly elevated total- and low density lipoprotein (LDL)-cholesterol levels. Cholesterol contents in tumors derived from adiponectin deficient mice were dramatically augmented. High fat high cholesterol diet further accelerated the tumor development in adiponectin deficient PyVT mice. The protein levels of LDL receptor (LDLR) were found to be upregulated in adiponectin-deficient tumor cells. In human breast carcinoma cells, treatment with LDL-cholesterol or overexpressing LDLR elevates nuclear beta-catenin activity and facilitates tumor cell proliferation. On the other hand, adiponectin decreased LDLR protein expression in breast cancer cells and inhibited LDL-cholesterol-induced tumor cell proliferation. Both in vivo and in vitro evidence demonstrated a stimulatory effect of adiponectin on autophagy process, which mediated the down-regulation of LDLR. Adiponectin-induced reduction of LDLR was blocked by treatment with a specific inhibitor of autophagy, 3-methyladenine. In conclusion, the study demonstrates that adiponectin elicits tumor suppressive effects by modulating cholesterol homeostasis and LDLR expression in breast cancer cells, which is at least in part attributed to its role in promoting autophagic flux.