Most patients with cystic fibrosis (CF) have a single codon deletion (DeltaF508) in the gene encoding the cystic fibrosis transmembrane conductance regulator (CFTR) that impairs assembly of the multidomain glycoprotein. The mutant protein escapes endoplasmic reticulum (ER) quality control at low temperature, but is rapidly cleared from the distal secretory pathway and degraded in lysosomes. CF cells accumulate free cholesterol similar to Niemann-Pick disease type C cells. We show that this lipid alteration is caused by the presence of misassembled mutant CFTR proteins, including DeltaF508, in the distal secretory pathway rather than the absence of functional CFTR. By contrast, cholesterol distribution is not changed by either D572N CFTR, which does not mature even at low temperature, or G551D, which is processed normally but is inactive. On expression of the DeltaF508 mutant, cholesterol and glycosphingolipids accumulate in punctate endosomal structures and cholesterol esters are reduced, indicating a block in the translocation of cholesterol to the ER for esterification. This is overcome by Rab9 overexpression, resulting in clearance of accumulating intracellular cholesterol. Similar but less pronounced alterations in intracellular cholesterol distribution are observed on expression of a temperature-rescued mutant variant of the related ATP-binding cassette (ABC) protein multidrug resistance-associated protein 1 (MRP1). Thus, on escape from ER quality control, misassembled mutants of CFTR and MRP1 impair lipid homeostasis in endocytic compartments.