Pseudohyponatremia secondary to hypercholesterolemia is a rare condition. In this study, the case of a 41-year-old woman who presented with acute hepatitis C virus infection and normal serum sodium and cholesterol concentrations is presented. Over the course of several weeks, she developed jaundice due to biopsy-confirmed intrahepatic cholestasis and severe hyponatremia, as measured by indirect potentiometry. She was initially intensively treated for hyponatremia. Additional evaluation identified severe hypercholesterolemia, occurring in the absence of lipemic serum. Lipoprotein analysis was consistent with lipoprotein X. Measurement of plasma osmolality and serum sodium concentration using direct potentiometry confirmed the presence of pseudohyponatremia. With supportive care, cholestasis and associated jaundice resolved leading to resolution of both hypercholesterolemia and pseudohyponatremia.