Oxysterol-binding protein (OSBP) and OSBP-related proteins (ORPs) have been implicated in the distribution of sterols among intracellular organelles. OSBP regulates the Golgi cholesterol level, but how it relates to Golgi function is elusive. Here we report that OSBP is essential for the localization of intra-Golgi soluble vesicle N-ethylmaleimide-sensitive fusion attachment protein receptors (v-SNAREs). Depletion of OSBP by small interfering RNA causes mislocalization of intra-Golgi v-SNAREs GS28 and GS15 throughout the cytoplasm without affecting the perinuclear localization of Golgi target-SNARE syntaxin5 and reduces the abundance of a Golgi enzyme, mannosidase II (Man II). GS28 mislocalization and Man II reduction are also induced by cellular cholesterol depletion. Three domains of OSBP-an endoplasmic reticulum-targeting domain, a Golgi-targeting domain, and a sterol-binding domain-are all required for Golgi localization of GS28. Finally, GS28 mislocalization and Man II reduction in OSBP-depleted cells are largely restored by depletion of ArfGAP1, a regulator of the budding of coat protein complex (COP)-I vesicles. From these results, we postulate that Golgi cholesterol level, which is controlled by OSBP, is essential for Golgi localization of intra-Golgi v-SNAREs by ensuring proper COP-I vesicle transport.