We report that lipids contribute to regulate the bidirectional motility of late endocytic compartments. Late endocytic vesicles loaded with cholesterol lose their dynamic properties, and become essentially immobile, including in cells from Niemann-Pick C patients. These vesicles then retain cytoplasmic dynein activity, but seem to be unable to acquire kinesin activity, eventually leading to paralysis. Our data suggest that this defect depends on the small GTPase Rab7, since the motility of vesicles loaded with cholesterol can be restored by the Rab7 inhibitory mutant N125I. Conversely, wild-type Rab7 overexpression mimics the effects of cholesterol on motility in control cells. Consistently, cholesterol accumulation increases the amounts of membrane-associated Rab7, and inhibits Rab7 membrane extraction by the guanine nucleotide dissociation inhibitor. Our observations thus indicate that cholesterol contributes to regulate the Rab7 cycle, and that Rab7 in turn controls the net movement of late endocytic elements. We conclude that motor functions can be regulated by the membrane lipid composition via the Rab7 cycle.