ATP-binding cassette transporter G1 (ABCG1) plays a role in the intracellular transport of cholesterol. Invariant NKT (iNKT) cells are a subpopulation of T lymphocytes that recognize glycolipid Ags. In this study, we demonstrate that ABCG1 regulates iNKT cell development and functions in a cell-intrinsic manner. Abcg1−/− mice displayed reduced frequencies of iNKT cells in thymus and periphery. Thymic iNKT cells deficient in ABCG1 had reduced membrane lipid raft content, and showed impaired proliferation and defective maturation during the early stages of development. Moreover, we found that Abcg1−/− mice possess a higher frequency of Vβ7+ iNKT cells, suggesting alterations in iNKT cell thymic selection. Furthermore, in response to CD3ε/CD28 stimulation, Abcg1−/− thymic iNKT cells showed reduced production of IL-4 but increased production of IFN-γ. Our results demonstrate that changes in intracellular cholesterol homeostasis by ABCG1 profoundly impact iNKT cell development and function.