Determining how cystic fibrosis (CF) impacts the regulation of cellular processes is key to understanding the pathology of the disease and to identifying new therapeutic targets. In this study, increased content of unesterified cholesterol is observed in lung and trachea sections obtained from CF patients compared to non-CF tissues suggesting an inherent flaw in cholesterol processing. Improper lysosomal storage of cholesterol is confirmed in cultured models by measuring fluorescent cholesterol accumulation in CF cells. Further aberrations in cholesterol transport are demonstrated by a significant increase in plasma membrane cholesterol content in both cultured CF cells and in nasal tissue excised from cftr -/- mice. Impaired intracellular cholesterol movement is predicted to stimulate cholesterol synthesis, a hypothesis supported by increased de novo cholesterol synthesis in lung and liver of cftr -/- mice compared to controls. Inhibition of cholesterol transport with U18666a to mimic this phenotype leads to a CF-like elevation in cytokine production in response to bacterial challenge in wt cells, but has no effect in CF-model cells, implicating this process as a source for inflammatory signaling in CF. These data demonstrate via multiple methods in both cultured and in vivo models that cellular cholesterol homeostasis is inherently altered in CF.