The study evaluated effects of cholesterol supplementation in a diet with high soybean meal (SBM) on the growth and cholesterol metabolism of giant grouper (Epinephelus lanceolatus). All‐fish‐meal diet was used as control. The diet including SBM (replaced 50% of the fish meal protein, SBM diet) and the SBM diet supplemented with 10 g/kg cholesterol (SBM + cholesterol) were used as experimental diets. Three diets were each fed to triplicate groups of juvenile grouper (initial body weight: 12.39 ± 0.36 g) in a recirculating aquaculture system for 8 weeks. Grouper fed the control diet showed higher (p < .05) weight gain, feed intake, feed efficiency and protein efficiency ratio than the other two dietary treatments. Hepatic cholesterol concentrations and 3‐hydroxy‐3‐methylglutaryl coenzyme A reductase gene expressions were higher in fish fed the control diet than fish fed the control diet and SBM + cholesterol diet. Hepatic cholesterol 7α‐hydroxylase gene expression was higher in fish fed the SBM + cholesterol diet than that in fish fed the control diet. Results indicate that giant grouper on a diet low in cholesterol can regulate cholesterol synthesis, suggesting that the reduced dietary cholesterol intake in the fish fed diet containing SBM is sufficiently compensated by increased cholesterol synthesis.