Sterols are essential lipid components of eukaryotic membranes. Here we summarize recent advances in understanding how sterols are transported between different membranes. Baker's yeast is a particularly attractive organism to dissect this lipid transport pathway, because cells can synthesize their own major sterol, ergosterol, in the membrane of the endoplasmic reticulum from where it is then transported to the plasma membrane. However, Saccharomyces cerevisiae is also a facultative anaerobic organism, which becomes sterol auxotroph in the absence of oxygen. Under these conditions, cells take up sterol from the environment and transport the lipid back into the membrane of the endoplasmic reticulum, where the free sterol becomes esterified and is then stored in lipid droplets. Steryl ester formation is thus a reliable readout to assess the back-transport of exogenously provided sterols from the plasma membrane to the endoplasmic reticulum. Structure/function analysis has revealed that the bulk membrane function of the fungal ergosterol can be provided by structurally related sterols, including the mammalian cholesterol. Foreign sterols, however, are subject to a lipid quality control cycle in which the sterol is reversibly acetylated. Because acetylated sterols are efficiently excreted from cells, the substrate specificity of the deacetylating enzymes determines which sterols are retained. Membrane-bound acetylated sterols are excreted by the secretory pathway, more soluble acetylated sterol derivatives such as the steroid precursor pregnenolone, on the other hand, are excreted by a pathway that is independent of vesicle formation and fusion. Further analysis of this lipid quality control cycle is likely to reveal novel insight into the mechanisms that ensure sterol homeostasis in eukaryotic cells. Article from a special issue on Steroids and Microorganisms.