Cholesterol homeostasis is vital for proper cellular and systemic functions. Disturbed cholesterol balance underlies not only cardiovascular disease but also an increasing number of other diseases such as neurodegenerative diseases and cancers. The cellular cholesterol level reflects the dynamic balance between biosynthesis, uptake, export and esterification — a process in which cholesterol is converted to neutral cholesteryl esters either for storage in lipid droplets or for secretion as constituents of lipoproteins. In this Review, we discuss the latest advances regarding how each of the four parts of cholesterol metabolism is executed and regulated. The key factors governing these pathways and the major mechanisms by which they respond to varying sterol levels are described. Finally, we discuss how these pathways function in a concerted manner to maintain cholesterol homeostasis.