Recent studies have shown that cellular metabolism is tightly linked to the regulation of immune cells. Here, we show that activation of cholesterol metabolism, involving cholesterol uptake, synthesis, and autophagy/lipophagy, is integral to innate immune responses in macrophages. In particular, cholesterol accumulation within endosomes and lysosomes is a hallmark of the cellular cholesterol dynamics elicited by Toll-like receptor 4 activation and is required for amplification of myeloid differentiation primary response 88 (Myd88) signaling. Mechanistically, Myd88 binds cholesterol via its CLR recognition/interaction amino acid consensus domain, which promotes the protein's self-oligomerization. Moreover, a novel supramolecular compound, polyrotaxane (PRX), inhibited Myd88‑dependent inflammatory macrophage activation by decreasing endolysosomal cholesterol via promotion of cholesterol trafficking and efflux. PRX activated liver X receptor, which led to upregulation of ATP binding cassette transporter A1, thereby promoting cholesterol efflux. PRX also inhibited atherogenesis in Ldlr-/- mice. In humans, cholesterol levels in circulating monocytes correlated positively with the severity of atherosclerosis. These findings demonstrate that dynamic changes in cholesterol metabolism are mechanistically linked to Myd88‑dependent inflammatory programs in macrophages and support the notion that cellular cholesterol metabolism is integral to innate activation of macrophages and is a potential therapeutic and diagnostic target for inflammatory diseases.