The nematode Caenorhabditis elegans represents an excellent model for studying many aspects of sterol function on the level of a whole organism. Recent studies show that especially two processes in the life cycle of the worm, dauer larva formation and molting, depend on sterols. In both cases, cholesterol or its derivatives seem to act as hormones rather than being structural components of the membrane. Investigations on C. elegans could provide information on the etiology of human diseases that display defects in the transport or metabolism of sterols.