The cholesterol substrate required for sustained adrenal steroidogenesis is largely derived from the endogenous stores of cholesterol esters, which are located in large lipid inclusion droplets in the cytoplasm. In isolated adrenal cells, these esters are hydrolyzed during a variety of stimuli associated with cellular cAMP production. This largely appears to be a response to the action of a neutral cholesterol ester hydrolase, whose activity is modulated by phosphorylation of the enzyme protein, catalyzed by cAMP-dependent protein kinase. Transfer of the resulting unesterified cholesterol to mitochondria can be accomplished in a model system by sterol carrier protein2 (SCP2). This protein is distinct from fatty acid binding protein (FABP), has a Mr of 13,500 and is basic in nature. SCP2 can sequester cholesterol from lipid inclusion droplets in a stoichiometric relationship, and transfer this cholesterol to isolated adrenal mitochondria. SCP2 can also enhance the intermembrane transfer of mitochondrial cholesterol to cytochrome P 450scc, but does not directly affect cholesterol side chain cleavage. The stimulatory effect of adrenal cytosolic preparations on mitochondrial pregnenolone production can be completely abolished by pretreatment with anti SCP2 IgG.