Fibroblast growth factor homologous factors (FHFs) bind to the cytoplasmic carboxy terminus of voltage-gated sodium channels (VGSCs) and modulate channel function. Variants in FHFs or VGSCs perturbing that bimolecular interaction are associated with arrhythmias. Like some channel auxiliary subunits, FHFs exert additional cellular regulatory roles, but whether these alternative roles affect VGSC regulation is unknown. Using a separation-of-function strategy, we show that a structurally guided, binding incompetent mutant FGF13 (the major FHF in mouse heart) confers complete regulation of VGSC steady-state inactivation (SSI), the canonical effect of FHFs. In cardiomyocytes isolated from Fgf13 knockout mice, expression of the mutant FGF13 completely restores wild-type regulation of SSI. FGF13 regulation of SSI derives from effects on local accessible membrane cholesterol, which is unexpectedly polarized and concentrated in cardiomyocytes at the intercalated disc (ID) where most VGSCs localize. Fgf13 knockout eliminates the polarized cholesterol distribution and causes loss of VGSCs from the ID. Moreover, we show that the previously described FGF13-dependent stabilization of VGSC currents at elevated temperatures depends on the cholesterol mechanism. These results provide new insights into how FHFs affect VGSCs and alter the canonical model by which channel auxiliary subunits exert influence.