Cholesterol is a waxy, fatty substance that is found in every cell of the body. It is involved in the production of cell membranes, some hormones, vitamin D, bile acids, and other tissues in the body. It also insulates nerves. Cholesterol is produced in the liver, but we also get cholesterol from our diet.The amount of cholesterol in the body depends on factors such as the rate of cholesterol production in the liver, the rate of cholesterol clearance from the body, the amount of dietary fat (particularly saturated fat) and to a lesser extent, cholesterol consumed.