Complex mechanisms regulate the cellular distribution of cholesterol, a critical component of eukaryote membranes involved in regulation of membrane protein functions directly and through the physiochemical properties of membranes. StarD4, a member of the steroidogenic acute regulator-related lipid-transfer (StART) domain (StARD)-containing protein family, is a highly efficient sterol-specific transfer protein involved in cholesterol homeostasis. Its mechanism of cargo loading and release remains unknown despite recent insights into the key role of phosphatidylinositol phosphates in modulating its interactions with target membranes. We have used large-scale atomistic Molecular dynamics (MD) simulations to study how the dynamics of cholesterol bound to the StarD4 protein can affect interaction with target membranes, and cargo delivery. We identify the two major cholesterol (CHL) binding modes in the hydrophobic pocket of StarD4, one near S136&S147 (the Ser-mode), and another closer to the putative release gate located near W171, R92&Y117 (the Trp-mode). We show that conformational changes of StarD4 associated directly with the transition between these binding modes facilitate the opening of the gate. To understand the dynamics of this connection we apply a machine-learning algorithm for the detection of rare events in MD trajectories (RED), which reveals the structural motifs involved in the opening of a front gate and a back corridor in the StarD4 structure occurring together with the spontaneous transition of CHL from the Ser-mode of binding to the Trp-mode. Further analysis of MD trajectory data with the information-theory based NbIT method reveals the allosteric network connecting the CHL binding site to the functionally important structural components of the gate and corridor. Mutations of residues in the allosteric network are shown to affect the performance of the allosteric connection. These findings outline an allosteric mechanism which prepares the CHL-bound StarD4 to release and deliver the cargo when it is bound to the target membrane.