Sterols are essential membrane components of eukaryotic cells. Interacting closely with sphingolipids, they provide the membrane surrounding required for membrane sorting and trafficking processes. Altering the amount and/or structure of free sterols leads to defects in endocytic pathways in mammalian cells and yeast. Plasma membrane structures functioning in the internalization step in mammalian cells, caveolae and clathrin-coated pits, are affected by cholesterol depletion. Accumulation of improper plasma membrane sterols prevents hyperphosphorylation of a plasma membrane receptor in yeast. Once internalized, sterols still interact with sphingolipids and are recycled to the plasma membrane to keep an intracellular sterol gradient with the highest amount of free sterols at the cell periphery. Interestingly, cells from patients suffering from sphingolipid storage diseases show high intracellular amounts of free cholesterol. We propose that the balanced interaction of sterols and sphingolipids is responsible for protein recruitment to specialized membrane domains and their functionality in the endocytic pathway.