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Cholesterol is the principal sterol of all higher animals, distributed in body tissues, especially the brain and spinal cord, and in animal fats and oils.

Cholesterol is biosynthesized by all animal cells and is an essential structural component of animal cell membranes. In vertebrates, hepatic cells typically produce the greatest amounts. In the brain, astrocytes produce cholesterol and transport it to neurons. It is absent among prokaryotes (bacteria and archaea), although there are some exceptions, such as Mycoplasma, which require cholesterol for growth. Cholesterol also serves as a precursor for the biosynthesis of steroid hormones, bile acid and vitamin D.

Elevated levels of cholesterol in the blood, especially when bound to low-density lipoprotein (LDL, often referred to as "bad cholesterol"), may increase the risk of cardiovascular disease.

François Poulletier de la Salle first identified cholesterol in solid form in gallstones in 1769. In 1815, chemist Michel Eugène Chevreul named the compound "cholesterine".