Cholesterol is an important constituent of most mammalian cell membranes and its concentration in various cellular membranes is tightly regulated. Although there is much information about cholesterol distribution and trafficking in cells, it is primarily derived from indirect measurements, and the results obtained using different approaches are often conflicting. A cholesterol analog that faithfully mimics the properties of cholesterol and can be followed in living cells would thus be very useful. In this study, we report the fluorescence imaging of such an analog, dehydroergosterol (DHE), in living cells. DHE differs from cholesterol in having three additional double bonds and an extra methyl group. In model systems, DHE closely mimics the behavior of native cholesterol. Using triple-labeling studies, we show that DHE colocalizes extensively with endocytosed transferrin, an endocytic recycling compartment marker, and with a marker for the trans-Golgi network, Tac-TGN38. This distribution of DHE is qualitatively similar to that observed when cells are labeled with the fluorescent cholesterol-binding polyene antibiotic, filipin, although there are differences in apparent proportions of DHE and filipin that are localized at the plasma membrane. Another cholesterol derivative, 25-NBD-cholesterol, has a structure that is compromised by the presence of a bulky NBD group and does not distribute to the same organelles as DHE or filipin. In addition, we show in this manuscript that kinetic processes can be followed in living cells by monitoring recovery of DHE fluorescence in a photobleached region over time. Our observations provide evidence for the presence of a large intracellular cholesterol pool in the endocytic recycling compartment and the trans-Golgi network that might play important roles in the trafficking of lipids, lipid-anchored proteins, and transmembrane proteins that preferentially partition into cholesterol-enriched membrane domains. In addition, this intracellular cholesterol pool might be involved in the maintenance of cellular cholesterol homeostasis.