Lipid rafts are membrane platforms that spatially organize molecules for specific signaling pathways that regulate various cellular functions. Cholesterol is critical for liquidordered raft formation by serving as a spacer between the hydrocarbon chains of sphingolipids, and alterations in the cholesterol contents of the plasma membrane causes disruption of rafts. The role that S receptors play in cancer is not clear, although it is frequently up-regulated in human cancer cells and tissues and S receptors inhibit proliferation in carcinoma and melanoma cell lines, induce apoptosis in colon and mammary carcinoma cell lines, and reduce cellular adhesion in mammary carcinoma cell lines. In this study, we provide molecular and functional evidence for the involvement of the enigmatic S1 receptors in lipid raft modeling by S1 receptor-mediated cholesterol alteration of lipid rafts in breast cancer cell lines. Cholesterol binds to cholesterol recognition domains in the COOH terminus of the S1 receptor. This binding is blocked by S receptor drugs because the cholesterol-binding domains form part of the S receptor drugbinding site, mutations of which abolish cholesterol binding. Furthermore, we outline a hypothetical functional model to explain the myriad of biological processes, including cancer, in which these mysterious receptors are involved. The findings of this study provide a biological basis for the potential therapeutic applications of lipid raft cholesterol regulation in cancer therapy using S receptor drugs. [Cancer Res 2007; 67(23):11166-75]