Dyslipidemia, the condition of elevated serum triglycerides, elevated low-density lipoprotein cholesterol, and/or low high-density lipoprotein cholesterol, is a public health problem of growing concern. Dyslipidemia clusters with other disorders of the metabolic syndrome that together influence, and may derive from, chronic inflammation. While best recognized as a risk factor for atherosclerotic cardiovascular disease, lipid dysregulation has recently been shown to influence a variety of disease processes in several organ systems. This review highlights our current understanding of the role of cholesterol and its homeostatic trafficking in pulmonary physiology and pathophysiology. Gene-targeted mice deficient in regulatory proteins that govern reverse cholesterol transport (e.g., ATP Binding Cassette transporter G1, apolipoprotein E) have recently been shown to have abnormal lung physiology, including dysregulated pulmonary innate and adaptive immune responses to the environment. It has also recently been shown that diet-induced dyslipidemia alters trafficking of immune cells to the lung in a manner that may have important implications for the pathogenesis of acute lung injury, asthma, pneumonia, and other lung disorders. Conversely, cholesterol-targeting pharmacologic agents, such as statins, apolipoprotein mimetic peptides, and Liver X Receptor agonists, have shown early promise in the treatment of several lung disorders. An improved understanding of the precise molecular mechanisms by which cholesterol and its trafficking modify pulmonary immunity will be required before the full implications of dyslipidemia as a lung disease modifier, and the full potential of lipid-targeting agents as pulmonary therapeutics, can be realized.