Cholesterol crystals are transparent, colorless, square to elongated sheets with one or more characteristic "broken" corners. They may occur loose, but often they are in piles or form larger aggregates. These crystals are usually found in acidic urine and usually do not show birefringence, although sometimes a faint birefringence may be visible. They are seen primarily in patients with nephrotic syndrome, in which there is a combination of severe proteinuria and lipids in the urine. Cholesterol crystals are then often accompanied by oval fat bodies, fat globules or fat cylinders.

In the differential diagnosis, it is important to differentiate from crystals of other origin, such as radiopaque substances (e.g., contrast agents) that can sometimes have a similar appearance. When cholesterol crystals are reported in the absence of other lipids, re-evaluation of the urine sample should be considered, as true cholesterol crystals are rare and usually do not occur in isolation.