Dysregulation of cholesterol homeostasis and concomitant cellular cholesterol accumulation substantially contribute to the pathophysiological mechanisms of a great variety of diseases. This generates an emerging need to develop drugs that can selectively decrease cellular cholesterol levels while having favorable pharmacokinetic and biodistribution profiles without significant adverse effects. Cyclodextrins, which are cyclic oligosaccharides capable of complexing cholesterol and other lipids, represent novel promising therapeutic agents, since they meet all of these requirements. Furthermore, cyclodextrins have been shown to effectively manipulate cholesterol levels and trafficking in in vitro and animal experiments and even clinical trials. In this review, we summarize the beneficial effects of cyclodextrins in several diseases focusing on the fact that besides their direct interaction with cholesterol, these compounds are proposed to activate alternative signaling pathways that ultimately result in decreased cellular cholesterol levels.