We studied the transport of the fluorescent cholesterol analog dehydroergosterol (DHE) in polarized HepG2 human hepatoma cells. DHE delivered via methyl-beta-cyclodextrin was delivered to both the apical and basolateral membranes and became concentrated in the apical membrane within 1 min. Intracellular DHE was targeted mainly to vesicles of the subapical compartment or apical recycling compartment (SAC/ARC), where it colocalized with fluorescent transferrin and fluorescent analogs of phosphatidylcholine and sphingomyelin. In contrast, transport of DHE from the plasma membrane to the trans-Golgi network was found to be very low. Vesicles containing DHE traversed the cells in both directions, but vesicular export of DHE from the SAC/ARC to the plasma membrane domains was low. Disruption of the microtubule cytoskeleton disturbed vesicular transport of DHE but not its enrichment in the apical (canalicular) membrane. Transport of DHE to the canalicular membrane after photobleaching was very rapid (t(12) = 1.6 min) and was largely ATP-independent in contrast to enrichment of DHE in the SAC/ARC. Release of DHE from the canalicular membrane was also ATP-independent but slower than the enrichment of sterol in the biliary canaliculus (t(12) = 5.4 min). Canalicular DHE could completely redistribute to the basolateral plasma membrane but could not transfer from one cell to the other cell of an HepG2 couplet. We conclude that sterol shuttles rapidly among the plasma membrane domains and other membrane organelles and that this nonvesicular pathway includes fast transbilayer migration.