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The G-protein coupled receptors (GPCRs) are the largest class of molecules involved in signal transduction across membranes, and represent major drug targets in all clinical areas. Membrane cholesterol has been reported to have a modulatory role in the function of a number of GPCRs. Interestingly, recently reported crystal structures of GPCRs have shown structural evidence of cholesterol binding sites. Two possible mechanisms have been previously suggested by which membrane cholesterol could influence the structure and function of GPCRs (i) through a direct/specific interaction with GPCRs, which could induce a conformational change in the receptor, or (ii) through an indirect way by altering the membrane physical properties in which the receptor is embedded or due to a combination of both. We discuss here a novel mechanism by which membrane cholesterol could affect structure and function of GPCRs and propose that cholesterol binding sites in GPCRs could represent 'nonannular' binding sites. Interestingly, previous work from our laboratory has demonstrated that membrane cholesterol is required for the function of the serotonin1A receptor, which could be due to specific interaction of the receptor with cholesterol. Based on these results, we envisage that there could be specific/nonannular cholesterol binding site(s) in the serotonin1A receptor. We have analyzed putative cholesterol binding sites from protein databases in the serotonin1A receptor, a representative GPCR, for which we have previously demonstrated specific requirement of membrane cholesterol for receptor function. Our analysis shows that cholesterol binding sites are inherent characteristic features of serotonin1A receptors and are conserved over evolution. Progress in deciphering molecular details of the nature of GPCR-cholesterol interaction in the membrane would lead to better insight into our overall understanding of GPCR function in health and disease, thereby enhancing our ability to design better therapeutic strategies to combat diseases related to malfunctioning of GPCRs.