Abstract Cholesterol and phospholipids serve as structural and functional components of cellular membranes in all eukaryotes. Heterogeneity in cholesterol and phospholipid content both within and between different organelles is an important characteristic of eukaryotic membranes. How this heterogeneity is achieved and orchestrated to maintain proper cellular physiology remains poorly understood. We previously found that overexpression of the Drosophilaoxysterol-binding protein (OSBP) leads to sterol accumulation in the Golgi apparatus. Here, we show that Osbp overexpression in a set of neuroendocrine neurons compromises the function of the Golgi apparatus. It impairs trafficking of the neuropeptide bursicon and results in post-eclosion behavior defects characterized by unexpanded wings. We performed a genetic screen to identify modifiers that suppress the unexpanded wing phenotype. A putative phospholipid flippase-encoding gene, CG33298, was validated, suggesting that a membrane-asymmetry-directed mechanism balances cholesterol chaos within the Golgi membranes. Since the functional connection between cholesterol metabolism and the activity of phospholipid flippase has been implicated in studies in yeast and worms, our findings here support an evolutionarily conserved causal link between cholesterol homeostasis and phospholipid asymmetry that maintains normal cellular physiology.