We show that fusion mediated by ecotropic murine leukemia virus envelope is dependent on cholesterol in receptor-bearing membranes. The effect is >10 times larger in insect cells than mammalian cells, probably because the former can be more extensively depleted of cholesterol. The fact that cholesterol is apparently not needed in envelope-bearing membranes suggests that it plays a role in an asymmetric step in membrane fusion and argues against a class of models in which cholesterol is important in symmetric fusion intermediates. The insect cell system has promise for clarifying the role of membrane rafts in other aspects of cell physiology.