Many cellular processes are sensitive to levels of cholesterol in specific membranes and show a strongly sigmoidal dependence on membrane composition. The sigmoidal responses of the cholesterol sensors involved in these processes could arise from several mechanisms, including positive cooperativity (protein effects) and limited cholesterol accessibility (membrane effects). Here, we describe a sigmoidal response that arises primarily from membrane effects due to sharp changes in the chemical activity of cholesterol. Our models for eukaryotic membrane-bound cholesterol sensors are soluble bacterial toxins that show an identical switch-like specificity for endoplasmic reticulum membrane cholesterol. We show that truncated versions of these toxins fail to form oligomers but still show sigmoidal binding to cholesterol-containing membranes. The nonlinear response emerges because interactions between bilayer lipids control cholesterol accessibility to toxins in a threshold-like fashion. Around these thresholds, the affinity of toxins for membrane cholesterol varies by >100-fold, generating highly cooperative lipid-dependent responses independently of protein-protein interactions. Such lipid-driven cooperativity may control the sensitivity of many cholesterol-dependent processes.