Niemann-Pick type C disease (NP-C) is a progressive lysosomal lipid storage disease caused by mutations in the NPC1 and NPC2 genes. NPC1 is essential for transporting cholesterol and other lipids out of lysosomes, but little is known about the mechanisms that control its cellular abundance and localization. Here we show that a reduction of TMEM97, a cholesterolresponsive NPC1-binding protein, increases NPC1 levels in cells through a post-transcriptional mechanism. Reducing TMEM97 through RNA-interference reduces lysosomal lipid storage and restores cholesterol trafficking to the endoplasmic reticulum in cell models of NP-C. In TMEM97 knockdown cells, NPC1 levels can be reinstated with wild type TMEM97, but not TMEM97 missing an ER-retention signal suggesting that TMEM97 contributes to controlling the availability of NPC1 to the cell. Importantly, knockdown of TMEM97 also increases levels of residual NPC1 in NPC1-mutant patient fibroblasts and reduces cholesterol storage in an NPC1-dependent manner. Our findings propose TMEM97 inhibition as a novel strategy to increase residual NPC1 levels in cells and a potential therapeutic target for NP-C.