The chemokine receptor, CCR5, is used as a human immunodeficiency virus coreceptor in combination with CD4 during transmission and early infection. CCR5 has been shown to be palmitoylated and targeted to cholesterol- and sphingolipid-rich membrane microdomains termed “lipid rafts.” However, the role of cholesterol and lipid rafts on chemokine binding and signaling through CCR5 remains unknown. We found that cholesterol extraction by hydroxypropyl-β-cyclodextrin (BCD) significantly reduced the binding and signaling of macrophage inflammatory protein 1β (MIP-1β) using CCR5-expressing CEM-NKR T cells. Reloading treated cells with cholesterol but not 4-cholesten-3-one, an oxidized form of cholesterol, restored MIP-1β binding to BCD-treated cells. Antibodies specific for distinct CCR5 epitopes lost their ability to bind to the cell surface after cholesterol extraction to varying degrees. Moreover, cells stained with fluorescently labeled MIP-1β extensively colocalized with the GM1 lipid raft marker while using anti-CCR5 antibodies; most of CCR5 on these cells only partially colocalized with GM1, suggesting that active ligand binding facilitates receptor association with lipid rafts or that raft association promotes a higher affinity conformation of CCR5. Together, these data demonstrate that cholesterol and lipid rafts are important for the maintenance of the CCR5 conformation and are necessary for both the binding and function of this chemokine receptor.