A direct link between Ca2+ and lipid homeostasis has not been definitively demonstrated. In this study, we show that manipulation of ER Ca2+ causes the re-distribution of a portion of the intracellular unesterified cholesterol to a pool that is not available to the SCAP-SREBP complex. The SREBP processing pathway in ER Ca2+ depleted cells remained fully functional and responsive to changes in cellular cholesterol status but differed unexpectedly in basal activity. These findings establish the role of Ca2+ in determining the reference set-point for controlling cellular lipid homeostasis. We propose that ER Ca2+ status is an important determinant of the basal sensitivity of the sterol sensing mechanism inherent to the SREBP processing pathway.