For successful infection of host cells and virion production, enveloped viruses, including Zika virus (ZIKV), extensively rely on cellular lipids. However, how virus protein–lipid interactions contribute to the viral life cycle remains unclear. Here, we employ a chemo-proteomics approach with a bifunctional cholesterol probe and show that cholesterol is closely associated with the ZIKV structural protein prM. Bioinformatic analyses, reverse genetics alongside with photoaffinity labeling assays, and atomistic molecular dynamics simulations identified two functional cholesterol binding motifs within the prM transmembrane domain. Loss of prM–cholesterol association has a bipartite effect reducing ZIKV entry and leading to assembly defects. We propose a model in which membrane-resident M facilitates cholesterol-supported lipid exchange during endosomal entry and, together with cholesterol, creates a platform promoting virion assembly. In summary, we identify a bifunctional role of prM in the ZIKV life cycle by mediating viral entry and virus assembly in a cholesterol-dependent manner.