Dietary absorption is a major way for mammals to obtain cholesterol, which is mediated by Niemann-Pick C1-like 1 (NPC1L1) via vesicular endocytosis. One fundamental question in this process is how free cholesterol is efficiently taken up through the internalization of NPC1L1. Using exogenously expressed NPC1L1-EGFP, we show that the lipid raft proteins flotillins associate with NPC1L1 and their localization is regulated by NPC1L1 during intracellular trafficking. Furthermore, flotillins are essential for NPC1L1-mediated cellular cholesterol uptake, biliary cholesterol reabsorption, and the regulation of lipid levels in mice. Together with NPC1L1, they form cholesterol-enriched membrane microdomains, which function as carriers for bulk of cholesterol. The hypocholesterolemic drug ezetimibe disrupts the association between NPC1L1 and flotillins, which blocks the formation of the cholesterol-enriched microdomains. Our findings reveal a functional role of flotillins in NPC1L1-mediated cholesterol uptake and elucidate the formation of NPC1L1-flotillins-postive cholesterol-enriched membrane microdomains as a mechanism for efficient cholesterol absorption.