An asymmetric distribution of phospholipids in the membrane bilayer is inseparable from physiological functions, including shape preservation and survival of erythrocytes, and by implication other cells. Aminophospholipids, notably phosphatidylserine (PS), are confined to the inner leaflet of the erythrocyte membrane lipid bilayer by the ATP-dependent flippase enzyme, ATP11C, counteracting the activity of an ATP-independent scramblase. Phospholipid scramblase 1 (PLSCR1), a single-transmembrane protein, was previously reported to possess scrambling activity in erythrocytes. However, its function was cast in doubt by the retention of scramblase activity in erythrocytes of knockout mice lacking this protein. We show that in the human erythrocyte PLSCR1 is the predominant scramblase and by reconstitution into liposomes that its activity resides in the transmembrane domain. At or below physiological intracellular calcium concentrations, total suppression of flippase activity nevertheless leaves the membrane asymmetry undisturbed. When liposomes or erythrocytes are depleted of cholesterol (a reversible process in the case of erythrocytes), PS quickly appears at the outer surface, implying that cholesterol acts in the cell as a powerful scramblase inhibitor. Thus, our results bring to light a previously unsuspected function of cholesterol in regulating phospholipid scrambling.