Peptide triazole thiols (PTTs) have been found previously to bind to HIV-1 Env spike gp120 and cause irreversible virus inactivation by shedding gp120 and lytically releasing luminal capsid protein p24. Since the virions remain visually intact, lysis appears to occur via limited membrane destabilization. To better understand the PTT-triggered membrane transformation involved, we investigated the role of envelope cholesterol on p24 release by measuring the effect of cholesterol depletion using methyl beta-cyclodextrin (MβCD). An unexpected bell-shaped response of PTT-induced lysis to [MβCD] was observed, involving lysis enhancement at low [MβCD] vs loss of function at high [MβCD]. The impact of cholesterol depletion on PTT-induced lysis was reversed by adding exogenous cholesterol and other sterols that support membrane rafts, while sterols that do not support rafts induced only limited reversal. Cholesterol depletion appears to cause a reduced energy barrier to lysis as judged by decreased temperature dependence with MβCD. Enhancement/replenishment responses to [MβCD] also were observed for HIV-1 infectivity, consistent with a similar energy barrier effect in the membrane transformation of virus cell fusion. Overall, the results argue that cholesterol in the HIV-1 envelope is important for balancing virus stability and membrane transformation, and that partial depletion, while increasing infectivity, also makes the virus more fragile. The results also reinforce the argument that the lytic inactivation and infectivity processes are mechanistically related and that membrane transformations occurring during lysis can provide an experimental window to investigate membrane and protein factors important for HIV-1 cell entry.