The fat cells of rat epididymal adipose tissue contain an average of 0.5 mg of cholesterol per gram of triglyceride. Of this cholesterol, 90% is nonesterified and 80% is located in the lipid storage compartment. The fat cell cholesterol content correlated positively with cell size. During fasting the free cholesterol of the adipocyte decreased in parallel with triglyceride, whereas the amount of esterified cholesterol did not change. The fat cell cholesterol content is independent of the amount of dietary cholesterol. On in vitro incubation of rat fat cells with radiolabeled acetate, mevalonate, glucose, leucine, or water, labeled cholesterol was synthesized. The rate of cholesterol synthesis increased with fat cell size. Fasting suppressed cholesterol synthesis by 90%, whereas refeeding stimulated the synthesis above values found in normally fed rats. Stimulation of lipolysis with theophylline or with dibutyryl cyclic AMP markedly inhibited cholesterol synthesis in fat cells. Insulin increased the incorporation of glucose and leucine into fat cell cholesterol. The cholesterol synthesis in fat cells was not suppressed by a high cholesterol diet. Addition of very low or low density lipoprotein into the incubation medium suppressed fat cell cholesterol synthesis whereas high density lipoprotein did not. The lipoprotein-free serum stimulated cholesterol synthesis compared with serum-free medium. The rate of cholesterol synthesis in total adipose tissue of rat was estimated to be 4% of that in the liver. It seems unlikely that the increased body cholesterol turnover present in obesity is accounted for by the enhanced cholesterol formation in the enlarged adipose tissue.