The importance of BCL-2 family proteins in the control of cell death has been clearly established. One of the key members of this family, BAX, has soluble, membrane-bound, and membrane-integrated forms that are central to the regulation of apoptosis. Using purified monomeric human BAX, defined liposomes, and isolated human mitochondria, we have characterized the soluble to membrane transition and pore formation by this protein. For the purified protein, activation, but not oligomerization, is required for membrane binding. The transition to the membrane environment includes a binding step that is reversible and distinct from the membrane integration step. Oligomerization and pore activation occur after the membrane integration. In cells, BAX targets several intracellular membranes but notably does not target the plasma membrane while initiating apoptosis. When cholesterol was added to either the liposome bilayer or mitochondrial membranes, we observed increased binding but markedly reduced integration of BAX into both membranes. This cholesterol inhibition of membrane integration accounts for the reduction of BAX pore activation in liposomes and mitochondrial membranes. Our results indicate that the presence of cholesterol in membranes inhibits the pore-forming activity of BAX by reducing the ability of BAX to transition from a membrane-associated protein to a membrane-integral protein.