The tools of somatic cell genetics have been instrumental in unraveling the pathway by which sterol regulatory element-binding proteins (SREBPs) control lipid metabolism in animal cells. SREBPs are membrane-bound transcription factors that enhance the synthesis and uptake of cholesterol and fatty acids. The activities of the SREBPs are controlled by the cholesterol content of cells through feedback inhibition of proteolytic processing. When cells are replete with sterols, SREBPs remain bound to membranes of the endoplasmic reticulum (ER) and are therefore inactive. When cells are depleted of sterols, the SREBPs move to the Golgi complex where two proteases release the active portions of the SREBPs, which then enter the nucleus and activate transcription of target genes. This processing requires three membrane proteins—a sterol-sensing escort protein (SCAP) that transports SREBPs from the ER to the Golgi and two Golgi-located proteases (S1P and S2P) that release SREBPs from membranes. The existence of all three proteins was revealed through analysis of mutant mammalian cells in tissue culture. Their cDNAs and genes were isolated by genetic complementation or by expression cloning. The somatic cell genetic approach described in this article should prove useful for unraveling other complex biochemical pathways in animal cells.