Cholesterol is not uniformly distributed in biological membranes. One of the factors influencing the formation of cholesterol-rich domains in membranes is the unequal lateral distribution of proteins in membranes. Certain proteins are found in cholesterol-rich domains. In some of these cases, it is as a consequence of the proteins interacting directly with cholesterol. There are several structural features of a protein that result in the protein preferentially associating with cholesterol-rich domains. One of the best documented of these is certain types of lipidations. In addition, however, there are segments of a protein that can preferentially sequester cholesterol. We discuss two examples of these cholesterol-recognition elements: the cholesterol recognition/interaction amino acid consensus (CRAC) domain and the sterol-sensing domain (SSD). The requirements for a CRAC motif are quite flexible and predict that a large number of sequences could recognize cholesterol. There are, however, certain proteins that are known to interact with cholesterol-rich domains of cell membranes that have CRAC motifs, and synthetic peptides corresponding to these segments also promote the formation of cholesterol-rich domains. Modeling studies have provided a rationale for certain requirements of the CRAC motif. The SSD is a larger protein segment comprising five transmembrane domains. The amino acid sequence YIYF is found in several SSD and in certain other proteins for which there is evidence that they interact with cholesterol-rich domains. The CRAC sequences as well as YIYF are generally found adjacent to a transmembrane helical segment. These regions appear to have a strong influence of the localization of certain proteins into domains in biological membranes. In addition to the SSD, there is also a domain found in soluble proteins, the START domain, that binds lipids. Certain proteins with START domains specifically bind cholesterol and are believed to function in intracellular cholesterol transport. One of these proteins is StAR-D1, that also has a mitochondrial targeting sequence and plays an important role in delivering cholesterol to the mitochondria of steroidogenic cells.