Cholesterol affects diverse biological processes, in many cases by modulating the function of integral membrane proteins. In this study we have investigated the role of cholesterol in the adenosine-dependent regulation of ion transport in colonic epithelial cells. We observed that methyl-beta-cyclodextrin (MbetaCD), a cholesterol-sequestering molecule, enhanced adenosine A(2A) receptor-activated transepithelial short circuit current (I(sc)), but only from the basolateral side. Cholesterol is a major constituent of membrane microdomains, called lipid rafts that also contain sphingolipids. However, studies with the sphingomyelin-degrading enzyme, sphingomyelinase, and the cholesterol-binding agent, filipin, indicated that the change in the level of cholesterol alone was sufficient to control the adenosine-modulated I(sc). Cholesterol depletion had a major effect on the functional selectivity of A(2A) receptors. Under control conditions, adenosine activated I(sc) more potently than the specific A(2A) agonist, CGS-21680, and the current was inhibited by XE991, an inhibitor of cAMP-dependent K(+) channels. Following cholesterol depletion, CGS-21680 activated I(sc) more potently than adenosine, and the current was inhibited by clotrimazole, an inhibitor of Ca(2+)-activated K(+) (IK1) channels. Co-immunoprecipitation experiments revealed that A(2A) receptors associate with IK1 channels following cholesterol depletion. These results suggest that cholesterol content in colonic epithelia affects adenosine-mediated anion secretion by controlling agonist-selective signaling.