The folate receptor is clustered on the surface of MA104 cells in association with caveolae. This relationship is thought to be essential for the proper internalization and recycling of the receptor during the delivery of 5-methyltetrahydrofolate to the cytoplasm of folate-depleted cells. Both the clustered organization of the receptor and the integrity of caveolae are disrupted when cells are deprived of cholesterol. We now show that cholesterol depletion of MA104 cells markedly reduces the rate of 5-methyltetrahydrofolate internalization and causes a 70% decline in the number of receptors present in the internal, recycling compartment. This effect is consistent with morphologic data showing that cholesterol-depleted MA104 cells have a reduced number of caveolae as well as fewer receptors per caveolae.