CD81 is a protein found in the cells of all vertebrates, including humans. CD81 performs an important role in the natural biology of a cell: it organises collections of proteins at the cell surface, allowing them to function together. Through this role, CD81 facilitates the activation of immune cells and the fusion of sperm and egg cells during fertilisation. As well these normal functions, CD81 is a receptor for hepatitis C virus, and malaria, to gain entry to liver cells. It was recently suggested that CD81 may be able to sense cholesterol at the cell surface, resulting in a switch-like movement in CD81, however, it is unknown whether this feature affects CD81 function. In this study, we generated variants of CD81 with disruptions in cholesterol sensing, and its associated switching mechanism. Our experiments suggest that HCV entry is dependent on the cholesterol-bound form of CD81, in which the switch is in a closed position. Our study provides evidence that cholesterol sensing is important for CD81 function; this work paves the way for future investigations into the role of CD81 in both health and disease.