Neurotransmitter receptor trafficking during synaptic plasticity requires the concerted action of multiple signaling pathways and the protein transport machinery. However, little is known about the contribution of lipid metabolism during these processes. In this paper, we addressed the question of the role of cholesterol in synaptic changes during long-term potentiation (LTP). We found that N-methyl-d-aspartate–type glutamate receptor (NMDAR) activation during LTP induction leads to a rapid and sustained loss or redistribution of intracellular cholesterol in the neuron. A reduction in cholesterol, in turn, leads to the activation of Cdc42 and the mobilization of GluA1-containing α-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid–type glutamate receptors (AMPARs) from Rab11-recycling endosomes into the synaptic membrane, leading to synaptic potentiation. This process is accompanied by an increase of NMDAR function and an enhancement of LTP. These results imply that cholesterol acts as a sensor of NMDAR activation and as a trigger of downstream signaling to engage small GTPase (guanosine triphosphatase) activation and AMPAR synaptic delivery during LTP.