Endocytic transport is critical for the subcellular distribution of free cholesterol and the endocytic recycling compartment (ERC) is an important organelle that stores cholesterol and regulates its trafficking. The C-terminal EHD protein, EHD1, controls receptor recycling through the ERC and affects free cholesterol distribution in the cell. We utilized embryonic fibroblasts from EHD1 knockout mice (Ehd1(-/-)MEF) and SiRNA in normal MEF cells to assess the role of EHD1 in intracellular transport of cholesterol. Surprisingly, Ehd1(-/-)MEFs displayed reduced levels of esterified and free cholesterol, which returned to normal level upon re-introduction of wild-type, but not dysfunctional EHD1. Moreover, triglyceride and cholesterol storage organelles known as 'lipid droplets' were smaller in size in cells lacking EHD1, indicating that less esterified cholesterol and triglycerides were being stored. Decreased cellular cholesterol and reduced lipid droplet size in Ehd1(-/-)MEFs correlated with ineffectual cholesterol uptake via LDL receptor, suggesting involvement of EHD1 in LDL receptor internalization.