The mechanisms or causes of pancreatic β-cell death as well as impaired insulin secretion, which are the principal events of diabetic etiopathology, are largely unknown. Diabetic complications are known to be associated with abnormal plasma lipid profile, mainly elevated level of cholesterol and free fatty acids. However, in recent years, elevated plasma cholesterol has been implicated as a primary modulator of pancreatic β-cell functions as well as death. High-cholesterol diet in animal models or excess cholesterol in pancreatic β-cell causes transporter desensitization and results in morphometric changes in insulin granules. Moreover, cholesterol is also held responsible to cause oxidative stress, mitochondrial dysfunction, and activation of proapoptotic markers leading to β-cell death. The present review focuses on the pathways and molecularevents that occur in the β-cell under the influence of excess cholesterol that hampers the basal physiology of the cell leading to the progression of diabetes.