The Niemann-Pick C2 protein (NPC2) is a sterol transfer protein in late endosomes and lysosomes (LE/LYSs). How its capacity to transport cholesterol between membranes is linked to endolysosomal membrane trafficking is not known. Using quantitative fluorescence imaging combined with soft X-ray tomography (SXT); we show that NPC2 mediated sterol efflux is accompanied by large changes in distribution, size and ultrastructure of endocytic organelles. We observed clearance of intra-luminal lipid deposits, a decrease in number of autophagosomes, formation of membrane contact sites (MCSs) to the endoplasmic reticulum and extensive tubulation of LE/LYSs in threedimensional SXT reconstructions of NPC2 treated human fibroblasts. The cells could recycle the cholesterol analog dehydroergosterol (DHE) from LE/LYSs slowly also in the absence of NPC2 protein but internalized NPC2 synchronized and accelerated this process significantly. Most fluorescent NPC2 was retained in LE/LYSs while DHE was selectively removed from these organelles, at least partially by non-vesicular exchange with other membranes. During sterol efflux LE/LYSs were reallocated to the cell periphery, where they could fuse with newly formed endosomes. Surface shedding of micro-vesicles was found, suggesting a pathway for cellular sterol release. We conclude that NPC2 mediated sterol efflux from LE/LYSs controls membrane traffic through the endo-lysosomal pathway.