Cholesterol entering cells in low-density lipoproteins (LDL) via receptor-mediated endocytosis is transported to organelles of the late endocytic pathway for degradation of the lipoprotein particles. The fate of the free cholesterol released remains poorly understood, however. Recent observations suggest that late-endosomal cholesterol sequestration is regulated by the dynamics of lysobisphosphatidic acid (LBPA)-rich membranes [1]. Genetic studies have pinpointed a protein, Niemann-Pick C-1 (NPC-1), that is required for the mobilization of late-endosomal/lysosomal cholesterol by an unknown mechanism [2]. Here, we report the removal of accumulated cholesterol by overexpression of the NPC-1 protein in NPC-1-deficient fibroblasts from patients with Niemann-Pick disease, and in normal fibroblasts upon release of a progesterone-induced block of cholesterol transport. We show that late-endosomal/lysosomal cholesterol mobilization is specifically inhibited by microinjection of Rab GDP-dissociation inhibitor (Rab-GDI). Moreover, clearance of the cholesterol deposits by NPC-1 in patients' fibroblasts is accompanied by the redistribution of LBPA and of a lysosomal hydrolase that utilizes the mannose-6-phosphate receptor. Our results reveal, for the first time, the involvement of a specific molecular component of the membrane-trafficking machinery in cholesterol transport and the coupling of late-endosomal cholesterol egress to the trafficking of other lipid and protein cargo.