Cholesterol is the major sterol component of all mammalian cell plasma membranes and plays a critical role in cell function and growth. Previous studies have shown that cholesterol inhibits inward rectifier K(+) (Kir) channels, but have not distinguished whether this is due directly to protein-sterol interactions or indirectly to changes in the physical properties of the lipid bilayer. Using purified bacterial and eukaryotic Kir channels reconstituted into liposomes of controlled lipid composition, we demonstrate by (86)Rb(+) influx assays that bacterial Kir channels (KirBac1.1 and KirBac3.1) and human Kir2.1 are all inhibited by cholesterol, most likely by locking the channels into prolonged closed states, whereas the enantiomer, ent-cholesterol, does not inhibit these channels. These data indicate that cholesterol regulates Kir channels through direct protein-sterol interactions likely taking advantage of an evolutionarily conserved binding pocket.