When guinea pigs are fed cholesterol, the cholesterol content of their red cells increases progressively, a large number of cells become spurred, and a hemolytic anemia develops. Unesterified cholesterol is readily transferred from plasma, HDL, or LDL of cholesterol-fed, anemic guinea pigs to normal red cells in vitro. This transfer is reversible and is proportional to the concentration of unesterified cholesterol in the incubation medium. Red cells loaded in vitro with cholesterol develop spurs identical with those on red cells in the circulation of cholesterol-fed, anemic guinea pigs. Neither the cholesterol content nor the morphology of normal red cells is altered by incubation in control plasma or in concentrated control lipoproteins. Plasma infranates (d > 1.21 g/ml) of either group do not cause spurring of control red cells. We conclude: (a) that accumulation of cholesterol by guinea pig red cells in vitro requires an increased concentration of unesterified cholesterol in lipoprotein rather than an increased concentration of normal lipoproteins, and (b) that an increased cholesterol content in guinea pig red cell membranes is necessary for their abnormal morphology. The flux of cholesterol between cholesterol-loaded cells and plasma from cholesterol-fed guinea pigs is three times greater than that between control red cells and control plasma, and the fractional exchange rates are altered.