The biosynthesis of Cholesterol predominantly takes place in the liver and in intestinal mucosa, but almost all cells synthesize it. It is a constituent of many membranes, it is also essential in the synthesis of bile acids and steroid hormones. It circulates in blood as cholesterol ester bound to beta lipoproteins. The measurement of the level of Cholesterol as well as Triglycerides and Lipoproteins is important in examining the metabolism of lipids. Changes in the level of Cholesterol mainly reflect disorders of liver function. Cholesterol level is increased in obstructive jaundice, diabetes mellitus and hypothyroidism. The level is decreased in some cases of hyperthyroidism and certain forms of anaemia. Identification of the different density fractions (HDL, LDL, VLDL) as well as total Cholesterol plays a role in the diagnosis.