In this review, we summarize our studies of membrane lipid transport in sphingolipid storage disease (SLSD) fibroblasts. We recently showed that several fluorescent SL analogs were internalized from the plasma membrane predominantly to the Golgi complex of normal cells, while in ten different SLSD cell types, these lipids accumulated in endosomes and lysosomes (The Lancet 1999;354: 901–905). Additional studies showed that cholesterol homeostasis is perturbed in multiple SLSDs secondary to SL accumulation and that mistargeting of SL analogs was regulated by cholesterol (Nature Cell Biol 1999;1: 386–388). Based on these findings, we hypothesize that endogenous sphingolipids, which accumulate in SLSD cells due to primary defects in lipid catabolism, result in an altered intracellular distribution of cholesterol, and that this alteration in membrane composition then results in defective sorting and transport of SLs. The importance of SL/cholesterol interactions and potential mechanisms underlying the regulation of lipid transport and targeting are also discussed. These studies suggest a new paradigm for regulation of membrane lipid traffic along the endocytic pathway and could have important implications for future studies of protein trafficking as well as lipid transport. This work may also lead to important future clinical developments (e.g. screening tests for SLSD, new methodology for screening drugs which abrogate lipid storage, and possible therapeutic approaches to SLSD).