The transmembrane protein Niemann-Pick C1 Like 1 (NPC1L1) belongs to the Niemann-Pick C1 (NPC1) family of cholesterol transporters and is mainly expressed in the liver and the small intestine. NPC1L1 is believed to be the main transporter responsible for the absorption of dietary cholesterol. Like NPC1, NPC1L1 contains a sterol sensing domain, suggesting that it might be sensitive to dietary cholesterol. To test this hypothesis, mucosal explants were cultured in the presence or absence of cholesterol. In the absence of cholesterol NPC1L1 was localized mainly in the brush border of the enterocyte, colocalizing with the brush border enzyme aminopeptidase N (APN), and only a minor part was present in intracellular compartments. In contrast, following culture in the presence of cholesterol a major part of NPC1L1 was found in intracellular compartments positive for the early endosomal marker early endosome antigen 1, whereas only a minor fraction was left in the brush border. Neither APN, lactase, nor sucrase-isomaltase was endocytosed in parallel, demonstrating that this is a selective cholesterol-induced endocytosis of NPC1L1. Conceivably either the induced internalization could be due to NPC1L1 acting as an endocytic cholesterol receptor or it could be a mechanism to reduce the cholesterol uptake. The fluorescent cholesterol analog NBD-cholesterol readily labeled the cytoplasm also under conditions nonpermissible for endocytosis, arguing against a receptor-mediated uptake. We therefore propose that cholesterol is absorbed by NPC1L1 acting as a membrane transporter and that NPC1L1 is internalized to an endosomal compartment to reduce the absorption of cholesterol.