Abstract Understanding mechanisms cells use to maintain cholesterol homeostasis are critical in cell biology and many diseases. To achieve this, the chemical activity of cholesterol in cell plasma membranes must be measured because activity controls cholesterol’s effects on cellular processes. To date, plasma membrane cholesterol concentration has been used to quantify cholesterol activity. But the activity of cholesterol is determined by its chemical potential; concentration contributes to, but does not accurately reflect membrane activity. Because a method to measure cholesterol chemical potential had not been available, it was not possible to properly evaluate many of cholesterol’s effects, including those on cellular signaling. We have now developed methods to do so. These methods and a new perfusion fluorimetry apparatus we have devised allow us to follow the chemical potential of cholesterol of plasma membranes in real time. We have discovered that cells quickly respond to changes in extracellular cholesterol by adjusting the cholesterol chemical potential of their plasma membranes without changing the total content of cellular cholesterol. This finding reveals a previously unknown mechanism to maintain cholesterol homeostasis: quick adjustment of plasma membrane chemical potentials to control cholesterol influx and efflux. We have identified protein scaffolded domains, as typified by caveolae, as sites at which cells sense and rapidly respond to external cholesterol. The abundance and total amount of cholesterol that resides in caveolae are determined by the extent of phosphorylation at position Ser80 of caveolin-1, the foundational protein of the domain. The shuttling of cholesterol between scaffolded domains and the surround which must result upon Ser80 phosphorylation alters cholesterol chemical potential. We therefore hypothesize that signaling cascades initiated within scaffolded domains are responsible for maintaining cholesterol homeostasis when cells are subjected to changes in external cholesterol and to growth factors. We further posit that these activated signaling cascades feed back to the plasma membrane to maintain chemical potentials. Cells will be stimulated with growth factors and relevant signaling cascades will be identified. The abundance of caveolae will be assessed by measuring the FRET (fluorescence resonance energy transfer) signals between caveolins. Our preliminary evidence strongly implicates that growth factors and/or changes in the level of external cholesterol stimulate the PI3K/Akt/mTOR signaling pathway that feeds back to achieve cholesterol homeostasis. Optogenetic techniques will be used to determine whether it and/or others are indeed responsible for control of cholesterol. Parallel experiments using the same strategies will determine if flotillins, analogous to caveolin, also serve as sensors/regulators of cholesterol chemical potentials.