In mammalian cells a complex interplay regulates the distribution of cholesterol between intracellular membrane compartments. One important aspect of cholesterol regulation is intracellular cholesterol storage in neutral lipid storage organelles called lipid droplets or lipid bodies (LBs). Recent work has thrust the LB into the limelight as a complex and dynamic cellular organelle. LBs play a crucial role in maintaining the cellular levels of cholesterol by regulating the interplay between lipid storage, hydrolysis and trafficking. Studies of caveolins, caveolar membrane proteins linked to lipid regulation, are providing new insights into the role of LBs in regulating cholesterol balance.