Mammalian enzymes in late cholesterol biosynthesis have been localized uniformly over the endoplasmic reticulum by enzymatic methods. We report here the first mammalian cholesterol biosynthetic enzyme unequivocally localized at the surface of intracellular lipid storage droplets. NAD(P)H steroid dehydrogenase-like protein (Nsdhl), a mammalian C-3 sterol dehydrogenase involved in the conversion of lanosterol into cholesterol, was localized on lipid droplets by immunofluorescence microscopy and subcellular fractionation. Nsdhl was localized on lipid droplets even when cell growth exclusively depended on cholesterol biosynthesis mediated by this enzyme. Depletion of fatty acids in culture medium reduced the development of lipid droplets and caused Nsdhl redistribution to the endoplasmic reticulum. Elevating oleic acid in medium induced well developed, Nsdhl-positive lipid droplets, and simultaneously caused a reduction in cellular conversion of lanosterol into cholesterol. Manipulated human NSDHL with a missense mutation (G205S) causing a human embryonic developmental disorder, congenital hemidysplasia with ichthyosiform nevus and limb defects (CHILD) syndrome, could no longer be localized on lipid droplets. Although the expression of wild-type NSDHL could restore the defective growth of a CHO cholesterol auxotroph, LEX2 in cholesterol-deficient medium, the expression of NSDHL(G205S) failed to do so. These results point to functional significance of the localization of Nsdhl on lipid droplets. Functional significance was also suggested by the colocalization of Nsdhl on lipid droplets with TIP47, a cargo selection protein for mannose 6-phosphate receptors from late endosomes to the trans-Golgi network. These results add to the growing notion that the lipid droplet is an organelle endowed with more complex roles in various biological phenomena.