Cholesterol granuloma is usually associated with chronic middle ear disease, less common in the orbit, and rare in the paranasal sinus. Cholesterol granuloma is thought to be initiated by hemorrhage, impaired drainage, and interruption of aeration. Here we report a case of cholesterol granuloma arising in the posterior ethmoid sinus mimicking meningocele. Magnetic resonance imaging is useful for differential diagnosis, and endoscopic surgery is effective for the management of cholesterol granuloma arising in the ethomoid sinus.