Cholesterol is an essential component of eukaryotic membranes and plays a crucial role in membrane organization, dynamics and function. The G-protein coupled receptors (GPCRs) are the largest class of molecules involved in signal transduction across membranes and constitute ~1-2% of the human genome. GPCRs have emerged as major targets for the development of novel drug candidates in all clinical areas due to their involvement in the generation of multitude of cellular responses. Membrane cholesterol has been reported to have a modulatory role in the function of a number of GPCRs. This effect could either be due to specific molecular interaction between cholesterol and GPCR, or due to alterations in the membrane physical properties induced by cholesterol. Alternatively, membrane cholesterol could modulate receptor function by occupying the 'nonannular' sites around the receptor. In this review, we have highlighted the nature of cholesterol dependence of GPCR function taking a few known examples.