Cholesterol granuloma is usually associated with chronic middle ear disease and is common in the mastoid antrum and air cells of the temporal bone. It has also been reported in other parts of the skull, such as the frontal and maxillary sinuses and orbit. Cholesterol granuloma is rare in the paranasal sinuses. We report a new case of cholesterol granuloma in the maxillary sinus of a 38-year-old man who underwent surgical excision. We also review the literature and discuss the mechanism of development for this lesion. The resected specimen showed fragments of respiratory mucosa with cholesterol clefts surrounded by multinucleated foreign-body giant cells. Some multinucleated foreign-body giant cells showed asteroid bodies. Hemorrhagic areas, hemosiderin-laden macrophages, chronic inflammatory cells, and dilated lymphatics vessels were seen as well. Increased intrasinus pressure due to drainage obstruction may affect venous and lymphatic drainage from the sinus cavity, leading to venule microhemorrhages while still allowing arterial blood into the sinus mucosa and further contributing to a large localized hemorrhage. Lymphatic drainage may be insufficient to completely remove the lipid components of the red blood cells, and the lipid accumulation may contribute to the formation of cholesterol crystals and their esters.