Cholesterol, in addition to providing rigidity to the fluid membrane, plays a critical role in receptor function, endocytosis, recycling, and signal transduction. In the present study, we examined the effect of membrane cholesterol on functional expression of tissue factor (TF), a cellular receptor for clotting factor VIIa. Depletion of cholesterol in human fibroblasts (WI-38) with methyl-β-cyclodextrin–reduced TF activity at the cell surface. Binding studies with radiolabeled VIIa and TF monoclonal antibody (mAB) revealed that reduced TF activity in cholesterol-depleted cells stems from the impairment of VIIa interaction with TF rather than the loss of TF receptors at the cell surface. Repletion of cholesterol-depleted cells with cholesterol restored TF function. Loss of caveolar structure on cholesterol removal is not responsible for reduced TF activity. Solubilization of cellular TF in different detergents indicated that a substantial portion of TF in fibroblasts is associated with noncaveolar lipid rafts. Cholesterol depletion studies showed that the TF association with these rafts is cholesterol dependent. Overall, the data presented herein suggest that membrane cholesterol functions as a positive regulator of TF function by maintaining TF receptors, probably in noncaveolar lipid rafts, in a high-affinity state for VIIa binding.