Cellular cholesterol homeostasis is maintained through activation of the designated sterol regulatory element binding proteins and liver X receptor transcriptional pathways. Insight into the molecular mechanisms that regulate these pathways has come from the study of Niemann-Pick C (NPC) disease. Mutations in the NPC1 and NPC2 disease genes lead to lysosomal accumulation of cholesterol and defects in regulation of sterol homeostatic responses. NPC1 and NPC2 are key participants in intracellular cholesterol trafficking and are required for production of low-density lipoprotein cholesterol-derived oxysterols. In this review, the function of NPC1 and NPC2 in sterol trafficking and regulation of cholesterol homeostasis is examined. Study of the NPC proteins will further understanding of the mechanisms involved in atherogenesis.