Bacillus cereus is a clinically significant foodborne pathogen that causes severe gastrointestinal and non-gastrointestinal disease. Cereolysin O (CLO) is a putative virulence factor of B. cereus, and its function remains to be investigated. In this study, we examined the biological activity of CLO from a deep sea B. cereus isolate. CLO was highly toxic to mammalian cells and triggered pyroptosis through NLRP3 inflammasome-mediated caspase 1 and gasdermin D activation. CLO-induced cell death involved ROS accumulation and K+ efflux, and was blocked by serum lipids. CLO bound specifically to cholesterol, and this binding was essential to CLO cytotoxicity. The structural integrity of the three tryptophan residues in the C-terminal undecapeptide was vital for CLO to interact with membrane lipids and cause membrane perforation. Taken together, these results provided new insights into the molecular mechanism of B. cereus CLO-mediated cytotoxicity.