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Cholesterol granuloma is a chronic foreign-body inflammatory response that is often seen in the middle ear, mastoid antrum, and petrous apex. However, it can also occur in other anatomical locations, including the orbit. A 34-year-old male presented with painless nonaxial proptosis of the left eye, and imaging revealed a well-defined intraorbital extraconal lesion consistent with an orbital cholesterol granuloma. The pathogenesis of this rare cystic condition is unknown, but trauma and inadequate airflow through pneumatized temporal bone air cells have been proposed as potential triggers. Treatment involves total excision of the granuloma with careful removal of residual tissue adherent to the bone and the periosteum to minimize the risk of recurrence. Cholesterol granulomas usually have a good prognosis.