The role of plasma membrane lipids in regulating the passage of ions and other solutes through the paracellular pathway remains controversial. In this study we explore the contribution of cholesterol (CH) in maintaining the barrier function of an epithelial cell line using the CH-solubilizing agent methyl beta-cyclodextrin (MBCD) to stimulate CH efflux. Inclusion of 20 mM MBCD in both apical and basolateral media reduced CH levels by 70-80% with no significant effect on cell viability. Most of that decrease occurred during the first 30 min of incubation. Recovery of CH content to initial values was nearly complete 22 h after removal of MBCD. Within 30 min of adding MBCD to the culture medium, transepithelial electrical resistance (TER) increased, reaching maximum values 30-40% above controls. This early rise in TER occurred when MBCD was added to either side of the monolayer. The later rapid decline in TER was observed only when MBCD bathed the basolateral surface from which, coincidentally, CH efflux was most rapid. Freeze fracture replicas and transmission electron microscopy of monolayers exposed to MBCD for only 30 min revealed no increase in either the average tight junction (TJ) strand number or the dimensions of the lateral intercellular space. There was a statistically significant increase in the number of TJ particles associated with the E fracture face at this time. This raises the interesting possibility that during CH efflux there is a change in the interaction between TJ particles and underlying cytoskeletal elements. There was no change in staining for occludin and ZO-1. After exposing the basolateral surface to MBCD for 2 h, TER fell below control levels. The accompanying increase in mannitol flux suggests strongly that the decrease in TER resulted from an increase in the permeability of the paracellular and not the transcellular pathway. A decrease in immuno-staining for occludin and ZO-1 at TJs, a striking accumulation of actin at tri-cellular areas as well as a decline in the number of parallel strands, as seen in freeze fracture replicas, suggest that changes in cytoskeletal organization during long incubations with MBCD had physically disrupted the TJ network. Data are presented which suggest that the observed changes in paracellular permeability during CH efflux may be related to increased levels of lipid-derived second messengers, some of which may trigger changes in the phosphorylation status of TJ proteins.