Iron delivery by transferrin (Tf) is accomplished through clathrin-mediated endocytosis of Tf receptors. The small molecule NSC306711 inhibits iron uptake from the Tf-TfR pathway. Here we show that the drug's mechanism of action is to induce internalization and degradation of unoccupied Tf receptors through an unexpected endocytic pathway. Unlike classical clathrin-mediated Tf receptor endocytosis, internalization promoted by NSC306711 is independent of clathrin and dynamin, and is sensitive to the cholesterol-depleting agents filipin and nystatin. The finding of this cholesterol-dependent Tf receptor internalization pathway through use of the small-molecule inhibitor sheds light on the pleiotropic nature of membrane trafficking dynamics and adds a complex dimension to our understanding of receptor regulation. Because of its unusual properties to inhibit iron uptake, we refer to NSC306711 as "ferristatin."