The cytokine interferon-gamma (IFN-γ) is a master regulator of innate and adaptive immunity involved in a broad array of human diseases that range from atherosclerosis to cancer. IFN-γ exerts it signaling action by binding to a specific cell surface receptor, the IFN-γ receptor (IFN-γR), whose activation critically depends on its partition into lipid nanodomains. However, little is known about the impact of specific lipids on IFN-γR signal transduction activity. Here, a new conserved cholesterol (chol) binding motif localized within its single transmembrane domain is identified. Through direct binding, chol drives the partition of IFN-γR2 chains into plasma membrane lipid nanodomains, orchestrating IFN-γR oligomerization and transmembrane signaling. Bioinformatics studies show that the signature sequence stands for a conserved chol-binding motif presented in many mammalian membrane proteins. The discovery of chol as the molecular switch governing IFN-γR transmembrane signaling represents a significant advance for understanding the mechanism of lipid selectivity by membrane proteins, but also for figuring out the role of lipids in modulating cell surface receptor function. Finally, this study suggests that inhibition of the chol-IFNγR2 interaction may represent a potential therapeutic strategy for various IFN-γ-dependent diseases.