We have monitored the ligand binding function of the bovine hippocampal 5-HT_1A receptor following treatment of native membranes with cholesterol oxidase. Cholesterol oxidase is a water soluble enzyme that acts on the membrane interface to catalyze the conversion of cholesterol to cholestenone. Oxidation of membrane cholesterol significantly inhibits the specific binding of the agonist and antagonist to 5-HT_1A receptors. Fluorescence polarization measurements of membrane probes incorporated at different locations in the membrane revealed no appreciable effect on membrane order due to the oxidation of cholesterol to cholestenone. These results therefore suggest that the ligand binding function of the 5-HT_1A receptor is a cholesterol-dependent phenomenon that is not related to the ability of cholesterol to modulate membrane order. Importantly, these results represent the first report on the effect of a cholesterol-modifying agent on the ligand binding function of this important neurotransmitter receptor.