Graphene possesses extraordinary properties that promise great potential in biomedicine. However, fully leveraging these properties requires close contact with the cell surface, raising the concern of unexpected biological consequences. Computational models have demonstrated that graphene preferentially interacts with cholesterol, a multifunctional lipid unique to eukaryotic membranes. Here we demonstrate an interaction between graphene and cholesterol. We find that graphene increases cell membrane cholesterol and potentiates neurotransmission, which is mediated by increases in the number, release probability, and recycling rate of synaptic vesicles. In fibroblasts grown on graphene, we also find an increase in cholesterol, which promotes the activation of P2Y receptors, a family of receptor regulated by cholesterol. In both cases, direct manipulation of cholesterol levels elucidates that a graphene-induced cholesterol increase underlies the observed potentiation of each cell signaling pathway. These findings identify cholesterol as a mediator of graphene's cellular effects, providing insight into the biological impact of graphene.