Cells and organisms adjust their growth based on the availability of cholesterol, which is essential for cellular functions. However, the mechanisms by which cells sense cholesterol levels and translate these into growth signals are not fully understood. We report that cholesterol rapidly activates the master growth-regulatory TOR pathway in Drosophila tissues. We identify the nuclear receptor HR3, an ortholog of mammalian RORα, as an essential factor in cholesterol-induced TOR activation. We demonstrate that HR3 binds cholesterol and promotes TOR pathway activation through a non-genomic mechanism acting upstream of the Rag GTPases. Similarly, we find that RORα is necessary for cholesterol-mediated TOR activation in human cells, suggesting that HR3/RORα represents a conserved mechanism for cholesterol sensing that couples cholesterol availability to TOR-pathway activity. These findings advance our understanding of how cholesterol influences cell growth, with implications for cholesterol-related diseases and cancer. Here, we demonstrate that dietary cholesterol intake leads to rapid and dynamic activation of the TOR pathway in tissues of Drosophila. This response is modulated by the Drosophila RORα ortholog, HR3, which – like RORα – binds cholesterol and is activated by this ligand. Although HR3 is known to be transcriptionally upregulated by the ecdysone steroid hormone EcR, our results reveal that HR3 regulates growth through the TOR pathway in response to cholesterol independently of ecdysone-mediated effects. This regulation involves rapid cholesterol-induced TOR activation that in part is independent of the transcriptional functions of HR3, through an isoform of HR3 that lacks a DNA-binding domain (DBD). Reducing HR3 levels in cells mitigate the overactivation of TOR caused by the intralysosomal accumulation of cholesterol resulting from depletion of Npc1a. This indicates that HR3 is necessary for TOR activation by lysosomal cholesterol. Our findings suggest that HR3 activates the TOR pathway upstream of Rag proteins. Furthermore, our findings indicate that RORα is involved in cholesterol-induced TOR activation in human cells, suggesting that a conserved function of HR3/RORα is to couple cholesterol levels to TOR-pathway activation