Lipids and lipid metabolism are critical factors in hair follicle (HF) biology, and cholesterol has long been suspected of influencing hair growth. Altered cholesterol homeostasis is involved in the pathogenesis of primary cicatricial alopecia, mutations in a cholesterol transporter are associated with congenital hypertrichosis, and dyslipidaemia has been linked to androgenic alopecia. The underlying molecular mechanisms by which cholesterol influences pathways involved in proliferation and differentiation within HF cell populations remain largely unknown. As such, expanding our knowledge of the role for cholesterol in regulating these processes is likely to provide new leads in the development of treatments for disorders of hair growth and cycling. This review describes the current state of knowledge with respect to cholesterol homeostasis in the HF along with known and putative links to hair pathologies.