P2X7 receptors are nonselective cation channels gated by high extracellular ATP, but with sustained activation, receptor sensitization occurs, whereby the intrinsic pore dilates, making the cell permeable to large organic cations, which eventually leads to cell death. P2X7 receptors associate with cholesterol-rich lipid rafts, but it is unclear how this affects the properties of the receptor channel. Here we show that pore-forming properties of human and rodent P2X7 receptors are sensitive to perturbations of cholesterol levels. Acute depletion of cholesterol with 5 mm methyl-β-cyclodextrin (MCD) caused a substantial increase in the rate of agonist-evoked pore formation, as measured by the uptake of ethidium dye, whereas cholesterol loading inhibited this process. Patch clamp analysis of P2X7 receptor currents carried by Na(+) and N-methyl-D-glucamine (NMDG(+)) showed enhanced activation and current facilitation following cholesterol depletion. This contrasts with the inhibitory effect of methyl-β-cyclodextrin reported for other P2X subtypes. Mutational analysis suggests the involvement of an N-terminal region and a proximal C-terminal region that comprises multiple cholesterol recognition amino acid consensus (CRAC) motifs, in the cholesterol sensitivity of channel gating. These results reveal cholesterol as a negative regulator of P2X7 receptor pore formation, protecting cells from P2X7-mediated cell death.