The plasma membrane is uniquely enriched in phosphatidylserine (PtdSer). This anionic phospholipid is restricted almost exclusively to the inner leaflet of the plasmalemma. Because of their high density, the headgroups of anionic lipids experience electrostatic repulsion that, being exerted asymmetrically, is predicted to favor membrane curvature. We demonstrate that cholesterol limits this repulsion and tendency to curve. Removal of cholesterol or insertion of excess PtdSer increases the charge density of the inner leaflet, generating foci of enhanced charge and curvature where endophilin and synaptojanin are recruited. From these sites emerge tubules that undergo fragmentation, resulting in marked endocytosis of PtdSer. Shielding or reduction of the surface charge or imposition of outward membrane tension minimized invagination and PtdSer endocytosis. We propose that cholesterol associates with PtdSer to form nanodomains where the headgroups of PtdSer are maintained sufficiently separated to limit spontaneous curvature while sheltering the hydrophobic sterol from the aqueous medium.