A causal relationship exists between macrophage cholesterol levels and inflammation, for example, Interleukin-1b (IL-1b) secretion. A decrease in intracellular K+ is essential for inflammasome activation/IL-1b secretion and, herein, we examined the hypothesis that cellular cholesterol affects K+ -channel activity and K+ -efflux using mouse peritoneal macrophages (MPMs) and human/THP1 macrophages. An increase in cellular cholesterol led to a significant increase in K+ currents (> 350% in both MPM and THP1). Enhancing cholesterol efflux returned K+ currents back to basal levels with corresponding increase in intracellular K+ (11.2–14.5%) and reduced IL-1b secretion (32–62%). These data demonstrate a novel mechanism by which cellular cholesterol modulates inflammation/inflammasome via regulation of K+ -channel activity and intracellular K+ levels. Attenuation of IL-1b secretion by Nateglinide/Repaglinide further suggests involvement of Kir6 channels.