Small interfering RNA (siRNA) therapeutics are an emerging modality for treating genetic and metabolic diseases, with 8 approved drugs now in clinical use. Despite substantial advances in delivery technologies, including lipid nanoparticles and N-acetylgalactosamine conjugates, inefficient intracellular trafficking, particularly endosomal escape, remains a critical limitation. Here, we identify cellular cholesterol as a key regulator of siRNA intracellular trafficking, endosomal escape, and pharmacologic efficacy. Using a 2D hepatocyte cell culture model and cationic-lipid-mediated delivery, we show that pharmacologic cholesterol reduction via statin treatment significantly impairs siRNA-mediated gene silencing with minimal effects on cellular uptake, indicating a post-internalization trafficking defect. Cholesterol supplementation restores silencing, confirming its essential role in functional siRNA activity. Confocal imaging reveals increased siRNA entrapment in late endosomes following statin treatment, consistent with impaired endosomal escape. Notably, chloroquine, an endosomal escape enhancer, rescues gene silencing under cholesterol-reduced conditions. Mechanistically, we identify annexin A2 (ANXA2) as a critical mediator of this cholesterol-sensitive trafficking pathway, as ANXA2 knockdown abrogates the restorative effect of cholesterol supplementation. Together, these findings uncover a previously unrecognized cholesterol- and ANXA2-dependent mechanism regulating siRNA efficacy. While these mechanistic insights are specific to cationic-lipid-based delivery, they highlight intracellular cholesterol as an important determinant of siRNA endosomal escape. Future studies using microphysiological systems or in vivo models will be essential to validate and extend these findings beyond this 2D cell culture model. SIGNIFICANCE STATEMENT: This study uncovers cholesterol as an essential and previously unrecognized determinant of small interfering RNA therapeutic efficacy, acting through annexin A2 to enable endosomal escape, a critical bottleneck in RNA drug delivery. The findings position cholesterol modulation as a viable approach to improve the intracellular delivery and therapeutic effectiveness of RNA-based drugs.