The role of cholesterol in regulation of endosome motility was investigated by monitoring the intracellular trafficking of endocytosed folate receptors (FRs) labeled with fluorescent folate conjugates. Real-time fluorescence imaging of HeLa cells transfected with GFP-tubulin revealed that FR-containing endosomes migrate along microtubules. Moreover, microinjection with antibodies that inhibit microtubule-associated motor proteins demonstrated that dynein and kinesin I participate in delivery of FR-containing endosomes to the perinuclear area and plasma membrane, respectively. Further, single particle tracking analysis revealed bidirectional motions of FR endosomes, mediated by dynein and kinesin motors associated with the same endosome. These experimental tools allowed us to use FR-containing endosomes to evaluate the impact of cholesterol on intracellular membrane trafficking. Lowering plasma membrane cholesterol by metabolic depletion or MbetaCD extraction was found to both increase FR-containing endosome motility and change endosome distribution from colocalization with Rab7 to colocalization with Rab4. These data provide evidence that cholesterol regulates intracellular membrane trafficking via modulation of the distribution of low molecular weight G-proteins that are adaptors for microtubule motors.