Niemann-Pick type C (NPC) is a disease that affects intracellular cholesterol-trafficking pathways. By cloning the hamster ortholog of NPC1, we identified the molecular lesions in two independently isolated Chinese hamster ovary cell mutants, CT60 and CT43. Both mutants lead to premature translational terminations of the NPC1 protein. Transfecting hamster NPC1 cDNA complemented the defects of the mutants. Investigation of the CT mutants, their parental cells, and an NPC1-stable transfectant allow us to present evidence that NPC1 is involved in a post-plasma membrane cholesterol-trafficking pathway. We found that the initial movement of low density lipoprotein (LDL)-derived cholesterol to the plasma membrane (PM) did not require NPC1. After reaching the PM and subsequent internalization, however, cholesterol trafficking back to the PM did involve NPC1. Both LDL-derived cholesterol and cholesterol originating from the PM accumulated in a dense, intracellular compartment in the CT mutants. Cholesterol movement from this compartment to the PM or endoplasmic reticulum was defective in the CT mutants. Our results functionally distinguish the dense, intracellular compartment from the early endocytic hydrolytic organelle and imply that NPC1 is involved in sorting cholesterol from the intracellular compartment back to the PM or to the endoplasmic reticulum.