The exquisite frequency selectivity and amplification characteristics of mammalian hearing intimately depend on the fast electromechanical motion of the outer hair cells in the cochlea. This membrane based process, termed electromotility, is driven by the protein prestin which is uniquely present in the OHC lateral wall. Voltage dependent motility, in OHCs and mammalian cells expressing prestin, is accompanied by intramembranous charge movement which is widely considered a signature of electromotility and prestin function. How prestin converts changes in membrane potential into axial length changes of OHCs is currently not understood at the molecular level. Many electromotility models predict that prestin conformational changes are the underlying mechanism connecting charge movement and motility. Currently, however, only indirect evidence for a prestin conformational change is available. Various experiments have indicated that the oligomeric states of prestin may be an important determinant of function. Numerous reports have provided varying estimates of prestin oligomeric state. However, estimates have been based on measurements performed outside the membrane making, firm biophysical conclusions difficult. Biophysical studies of prestin function have demonstrated its dependence on membrane properties. Alterations of membrane cholesterol affect voltage dependence of charge movement and motility. In addition cholesterol manipulations cause spatial redistribution of prestin and possibly change prestin oligomeric state. However, the underlying cause for prestin sensitivity to cholesterol and its relation to membrane distribution is unknown. We have applied single molecule fluorescence (SMF) imaging, single particle tracking (SPT), and Förster resonance energy transfer (FRET) to investigate prestin interactions at the molecular level. The results of our SMF experiments have suggested that prestin forms mainly tetramers and dimers in the cell membrane. Using SPT to map the trajectories of prestin in the membrane, we have found that prestin undergoes diffusion in and hops between membrane confinements of varying size. In addition, we have found that cholesterol affects the size and confinement strength of the compartments but does not affect the diffusivity within the compartments. Finally, using a combination of electrophysiology and FRET we have demonstrated that prestin undergoes voltage dependent structural changes. In total, our results refine our molecular understanding of prestin function.