Although it is one of the three main types of membrane lipids (along with phospholipids and glycolipids) cholesterol's structure is quite different. It is a steroid, and so it is made from four linked hydrocarbon rings, including three six-membered rings and one five-membered ring.

Cholesterol is a very important molecule for a number of reasons. One function of cholesterol is to regulate membrane fluidity in the plasma membrane. Another very important role that cholesterol plays is as the precursor to a number of steroid hormones including cortisol, testosterone, estradiol, and progesterone. Insulin, however, is a peptide hormone made in the pancreas.

Cholesterol is a molecule with 27 carbon atoms. In order to synthesize this steroid, a three step process must be completed. First, isopentenyl pyrophosphate is synthesized. Second, six isopentenyl pyrophosphates form squalene. Third, squalene cyclizes and the product of this is converted to cholesterol. The building blocks that began this whole process were carbons from acetyl-CoA.

Steroids are derivatives of the molecule cyclopentanoperhydrophenanthrene which is composed of 4 fused carbon rings. There are three hexane rings and one pentane ring in the structure of steroids.

The fist step of cholesterol synthesis is the synthesis of isopentenyl pyrophosphate from acetyl-CoA molecules, and this occurs in the cytoplasm. The second step of cholesterol synthesis is six isopentenyl pyrophosphate molecules converging to form squalene. This occurs in the endoplasmic reticulum. The third step of cholesterol synthesis is the cyclization of squalene and the final conversion of the molecule to cholesterol. This occurs in the endoplasmic reticulum.

Once acetyl-CoA molecules have been converted to 3-hydroxy-3-methylglutary-CoA (HMG-CoA), reduction to mevalonate occurs. This synthesis is an irreversible step in the pathway to create cholesterol, and therefore it is the committed step in cholesterol synthesis.

Steroid hormones are derivatives of cholesterol and therefore can pass through the plasma membrane of cells since they are lipophilic. Steroid hormones generally don't bind on the surface of plasma membranes, but instead to receptors inside the cell itself. Since they are nonpolar, they are carried by proteins in the blood.