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Cholesterol plays an important role in cellular homeostasis by maintaining the rigidity of cell membranes, providing a medium for signaling transduction, and being converted into other vital macromolecules, such as sterol hormones and bile acids. Epidemiological studies have shown the correlation between cholesterol content and cancer incidence worldwide. Accumulating evidence has shown the emerging roles of the dysregulation of cholesterol metabolism in cancer development. More specifically, recent reports have shown the distinct role of cholesterol in the suppression of immune cells, regulation of cell survival, and modulation of cancer stem cells in cancer. Here, we provide a comprehensive review of the epidemiological analysis, functional roles, and mechanistic action of cholesterol homeostasis in regard to its contribution to cancer development. Based on the existing data, cholesterol homeostasis is identified to be a new key player in cancer pathogenesis. Lastly, we also discuss the therapeutic implications of natural compounds and cholesterol-lowering drugs in cancer prevention and treatment. In conclusion, intervention in cholesterol metabolism may offer a new therapeutic avenue for cancer treatment.