CXCR4 is a G-protein coupled receptor which mediates signalling for diverse functions such as cell proliferation and migration, hematopoiesis and plays a role in embryogenesis and development. Signal transduction occurs primarily through transmembrane helices that function in the multicomponent lipid environment of the plasma membrane. Elevated levels of plasma membrane oxysterols occur in cardiovascular and metabolic disorders, physiological stress and inflammatory conditions. We use experimental and simulation approaches to study the impact of oxysterol chemistry and composition on CXCL12-mediated CXCR4 signalling. Experiments on HeLa cells show a pronounced decrease in calcium oscillation response for the tail oxidized sterols in comparison with the ring oxidized sterols with 22(R) hydroxycholesterol showing a near complete loss of signalling followed by 27-hydroxycholesterol and 25-hydroxycholesterol. All-atom molecular dynamics simulations reveal that tail oxidized, 27-hydroxycholesterol, displaces cholesterol and ubiquitously binds to several critical signalling residues, as well as the dimer interface. Enhanced 27-hydroxycholesterol binding alters CXCR4 residue conformations, disrupts the toggle switch and induces secondary structure changes at both N and C termini. Our study provides a molecular view of the observed mitigated CXCR4 signalling in the presence of oxysterols revealing that disruption of cholesterol-protein interactions, important for regulating the active state, is a key factor in the loss of CXCR4 signalling. Additionally, a signalling class switching from Gαito Gαsas revealed by increased CREB and ERK phosphorylation is observed in the experiments.