Cholesterol is so important to the body that it makes it itself. Your body does need food to fuel the cholesterol production process, but it can be virtually any kind of food, even the cholesterol-free kind.
Mother Nature doesn’t leave it up to humans to get whatever they need from diet alone. So even if you ate a completely cholesterol-free diet, your body would make the approximately 1,000 mg it needs to function properly.
Your body has the ability to regulate the amount of cholesterol in the blood, producing more when your diet doesn’t provide adequate amounts. The regulation of cholesterol synthesis is an elegant process that is tightly controlled.
Almost all of the cells of the body can make the cholesterol they need. The liver, however, is an especially efficient cholesterol factory, efficient enough that it can afford to export much of what it makes.
The liver packages much of its cholesterol into lipoproteins that can be delivered to cells throughout the body, providing a supplement to what each cell can make on its own. This supplement is especially important to the areas of the body that utilize a lot of cholesterol — like the testes in men and the ovaries in women, where the sex hormones are created.
Your body does need food to fuel the cholesterol production process, but it can be virtually any kind of food. As long as the food contains carbon — which carbohydrates, fats, and proteins all do — it provides the body with the building blocks to make its own cholesterol. Cholesterol is made out of the carbon that is recycled from the food you eat. Saturated fats, however, raise blood cholesterol levels more than other types of food, which is why people watching their cholesterol are told to avoid them.
From Harvard Medical School Health Publications: Understanding Cholesterol