Frizzled (Fzd) proteins are Wnt receptors and play essential roles in development, homeostasis, and oncogenesis. How Wnt/Fzd signaling is coupled to physiological regulation remains unknown. Cholesterol is reported as a signaling molecule regulating morphogen such as Hedgehog signaling. Despite the elusiveness of the in-depth mechanism, it is well-established that pancreatic cancer specially requires abnormal cholesterol metabolism levels for growth. In this study, it is unexpectedly found that among ten Fzds, Fzd5 has a unique capacity to bind cholesterol specifically through its conserved extracellular linker region. Cholesterol-binding enables Fzd5 palmitoylation, which is indispensable for receptor maturation and trafficking to the plasma membrane. In Wnt-addicted pancreatic ductal adenocarcinoma (PDAC), cholesterol stimulates tumor growth via Fzd5-mediated Wnt/beta-catenin signaling. A natural oxysterol, 25-hydroxylsterol competes with cholesterol and inhibits Fzd5 maturation and Writ signaling, thereby alleviating PDAC growth. This cholesterol-receptor interaction and ensuing receptor lipidation uncover a novel mechanism by which Fzd5 acts as a cholesterol sensor and pivotal connection coupling lipid metabolism to morphogen signaling. These findings further suggest that cholesterol-targeting may provide new therapeutic opportunities for treating Wnt-dependent cancers.