Poly(ethylene glycol)-cholesterol (PEG-Chol) conjugates are composed of “hydrophilically-flexible” PEG and “hydrophobically-rigid” Chol molecules. PEG-Chol conjugates are capable of forming micelles through molecular self-assembly and they are also used extensively for the PEGylation of drug delivery systems (DDS). The PEGylated DDS have been shown to display optimized physical stability properties in vitro and longer half-lives in vivo when compared with non-PEGylated DDS. Cell uptake studies have indicated that PEG-Chol conjugates are internalized via clathrin-independent pathways into endosomes and Golgi apparatus. Acid-labile PEG-Chol conjugates are also able to promote the content release of PEGylated DDS when triggered by dePEGylation at acidic conditions. More importantly, biodegradable PEG-Chol molecules have been shown to decrease the “accelerated blood clearance” phenomenon of PEG-DSPE. Ligands, peptides or antibodies which have been modified with PEG-Chols are oftentimes used to formulate active targeting DDS, which have been shown in many systems recently to enhance the efficacy and lower the adverse effects of drugs. Production of PEG-Chol is simple and efficient, and production costs are relatively low. In conclusion, PEG-Chol conjugates appear to be very promising multifunctional biomaterials for many uses in the biomedical sciences and pharmaceutical industries.