Cholesterol plays a vital role in cell biology. Dietary cholesterol or "exogenous" cholesterol accounts for approximately one-third of the pooled body cholesterol, and the remaining 70% is synthesized in the body (endogenous cholesterol). Increased dietary cholesterol intake may result in increased serum cholesterol in some individuals, while other subjects may not respond to dietary cholesterol. However, diet-increased serum cholesterol levels do not increase the low-density lipoprotein/high-density lipoprotein (LDL/HDL) cholesterol ratio, nor do they decrease the size of LDL particles or HDL cholesterol levels. Elevated levels of LDL cholesterol, reduced HDL cholesterol levels, and small, dense LDL particles are independent risk factors for coronary artery disease. Dietary cholesterol is the primary approach for treatment of conditions such as the Smith-Lemli-Opitz syndrome. Recent studies have highlighted mechanisms for absorption of dietary cholesterol. These studies have help understand how dietary and/or pharmaceutical agents inhibit cholesterol absorption and thereby reduce LDL cholesterol concentrations. In this article, various aspects of cholesterol metabolism, including dietary sources, absorption, and abnormalities in cholesterol metabolism, have been summarized and discussed.