The intracellular transport of cholesterol is subject to tight regulation. The structure of the lysosomal integral membrane protein type 2 (LIMP-2, also known as SCARB2) reveals a large cavity that traverses the molecule and resembles the cavity in SR-B1 that mediates lipid transfer. The detection of cholesterol within the LIMP-2 structure and the formation of cholesterol-like inclusions in LIMP-2 knockout mice suggested the possibility that LIMP2 transports cholesterol in lysosomes. We present results of molecular modeling, crosslinking studies, microscale thermophoresis and cell-based assays that support a role of LIMP-2 in cholesterol transport. We show that the cavity in the luminal domain of LIMP-2 can bind and deliver exogenous cholesterol to the lysosomal membrane and later to lipid droplets. Depletion of LIMP-2 alters SREBP-2-mediated cholesterol regulation, as well as LDL-receptor levels. Our data indicate that LIMP-2 operates in parallel with Niemann Pick (NPC)-proteins, mediating a slower mode of lysosomal cholesterol export.