A method in which a cholesterol moiety was covalently attached to oligonucleotides via a disulfide bond has been proposed as a means for studying the penetration of oligonucleotides into living cells. This bond may be cleaved by a mild treatment with thiol-containing reagents during some stages of the uptake process. Attachment of the cholesterol moiety resulted in a 30-50-fold increase in uptake of the oligonucleotide derivative by T24 human carcinoma cells. However, more than 80% of the oligonucleotide derivative remained on the external surface of the cellular membrane. Within the cytoplasm, the oligonucleotide derivatives were found in endosome-like vesicles which were observed during the first 6 h following treatment. Oligonucleotide moieties never cross the membrane, and endocytosis, with or without receptors, is the principal mechanisms for cellular uptake. Only about 15% of the oligonucleotides that penetrated the cells were found in the nuclear fraction. Treatment of the cells with dithiothreitol resulted in a release of most of the cell-associated oligonucleotide derivatives from the external surface of the membrane, but did not change the chemical state or intracellular distribution of the penetrated oligonucleotide derivatives. Mechanisms of the binding of cholesterol-modified oligonucleotides to cellular membranes, non-receptor mediated endocytosis and the role oligonucleotide transportation mechanisms play in determining the fate of penetrated oligonucleotides within the cell are discussed.