Several cues for cell proliferation, migration, and survival are transmitted through lipid rafts, membrane microdomains enriched in sphingolipids and cholesterol. Cells obtain cholesterol from the circulation but can also synthesize cholesterol de novo through the mevalonate/isoprenoid pathway. This pathway, however, has several branches and also produces non-sterol isoprenoids. Squalene synthase (SQS) is the enzyme that determines the switch toward sterol biosynthesis. Here we demonstrate that in prostate cancer cells SQS expression is enhanced by androgens, channeling intermediates of the mevalonate/isoprenoid pathway toward cholesterol synthesis. Interestingly, the resulting increase in de novo synthesis of cholesterol mainly affects the cholesterol content of lipid rafts, while leaving non-raft cholesterol levels unaffected. Conversely, RNA interference-mediated SQS inhibition results in a decrease of raft-associated cholesterol. These data show that SQS activity and de novo cholesterol synthesis are determinants of membrane microdomain-associated cholesterol in cancer cells. Remarkably, SQS knock down also attenuates proliferation and induces death of prostate cancer cells. Similar effects are observed when cancer cells are treated with the chemical SQS inhibitor zaragozic acid A. Importantly, although the anti-tumor effect of statins has previously been attributed to inhibition of protein isoprenylation, the present study shows that specific inhibition of the cholesterol biosynthesis branch of the mevalonate/isoprenoid pathway also induces cancer cell death. These findings significantly underscore the importance of de novo cholesterol synthesis for cancer cell biology and suggest that SQS is a potential novel target for antineoplastic intervention.