Cellular cholesterol levels are controlled by endoplasmic reticulum (ER) sterol sensing proteins, which include Scap and Insig-1. With cholesterol sufficiency, Insig inhibits the activation of sterol regulatory element binding proteins (SREBPs), key transcription factors for cholesterol and fatty acid biosynthetic genes, by associating with Scap-SREBP complexes to promote their ER retention. Here we show that the multimeric ER proteins erlins-1 and -2 are additional SREBP regulators. Depletion of erlins from cells grown with sterol sufficiency led to canonical activation of SREBPs and their target genes. Moreover, SREBPs, Scap, and Insig-1 were physically associated with erlins. Erlins bound cholesterol with specificity and strong cooperativity and responded to ER cholesterol changes with altered diffusional mobility, suggesting that erlins themselves may be regulated by cholesterol. Together, our results define erlins as novel cholesterol-binding proteins that are directly involved in regulating the SREBP machinery. We speculate that erlins promote stability of the SREBP-Scap-Insig complex and may contribute to the highly cooperative control of this system.