Divergent hypotheses exist to explain how signaling by the B cell receptor (BCR) is initiated after antigen binding and how it is qualitatively altered in anergic B cells to selectively uncouple from nuclear factor κB and c-Jun N-terminal kinase pathways while continuing to activate extracellular signal–regulated kinase and calcium–nuclear factor of activated T cell pathways. Here we find that BCRs on anergic cells are endocytosed at a very enhanced rate upon binding antigen, resulting in a large steady-state pool of intracellularly sequestered receptors that appear to be continuously cycling between surface and intracellular compartments. This endocytic mechanism is exquisitely sensitive to the lowering of plasma membrane cholesterol by methyl-β-cyclodextrin, and, when blocked in this way, the sequestered BCRs return to the cell surface and RelA nuclear accumulation is stimulated. In contrast, when plasma membrane cholesterol is lowered and GM1 sphingolipid markers of membrane rafts are depleted in naive B cells, this does not diminish BCR signaling to calcium or RelA. These results provide a possible explanation for the signaling changes in clonal anergy and indicate that a chief function of membrane cholesterol in B cells is not to initiate BCR signaling, but instead to terminate a subset of signals by rapid receptor internalization.