Cholesterol-dependent cytolysins (CDCs) are the distinct class of β-barrel pore-forming toxins (β-PFTs) that attack eukaryotic cell membranes, and form large, oligomeric, transmembrane β-barrel pores. Listeriolysin O (LLO) is a prominent member in the CDC family. As documented for the other CDCs, membrane cholesterol is essential for the pore-forming functionality of LLO. However, it remains obscure how exactly cholesterol facilitates its pore formation. Here, we show that cholesterol promotes both membrane-binding and oligomerization of LLO. We demonstrate cholesterol not only facilitates membrane-binding, it also enhances the saturation threshold of LLO-membrane association, and alteration of the cholesterol-recognition motif (CRM) in the LLO mutant (LLOT515G-L516G) compromises its pore-forming efficacy. Interestingly, such defect of LLOT515G-L516G could be rescued in the presence of higher membrane cholesterol levels, suggesting cholesterol can augment the pore-forming efficacy of LLO even in the absence of a direct toxin-cholesterol interaction. Furthermore, we find the membrane-binding and pore-forming abilities of LLOT515G-L516G, but not those of LLO, correlate with the cholesterol-dependent rigidity/ordering of the membrane lipid bilayer. Our data further suggest that the line tension derived from the lipid phase heterogeneity of the cholesterol-containing membranes could play a pivotal role in LLO function, particularly in the absence of cholesterol binding. Therefore, in addition to its receptor-like role, we conclude cholesterol can further facilitate the pore-forming, membrane-damaging functionality of LLO by asserting the optimal physicochemical environment in membranes. To the best of our knowledge, this aspect of the cholesterol-mediated regulation of the CDC mode of action has not been appreciated thus far.