UNITED STATES

OMB APPROVAL

SECURITIES AND EXCHANGE COMMISSION

OMB Number:
3235-0145

Washington, D.C. 20549

Expires:
February 28, 2009

SCHEDULE 13G

Estimated average burden hours per response. . 10.4

o

Rule 13d-1(b)

x

Rule 13d-1(c)

o

Rule 13d-1(d)

CUSIP No. 170393102

1.

Names of Reporting Persons/
I.R.S. Identification Nos. of above persons (entities only)

Discovery Equity Partners, L.P.

2.

Check the Appropriate Box if a Member of a Group (See Instructions)

Not Applicable

(a)

o

(b)

o

3.

SEC Use Only

4.

Citizenship or Place of Organization

Illinois

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power

None

6.

Shared Voting Power

540,795

7.

Sole Dispositive Power

None

8.

Shared Dispositive Power

540,795

9.

Aggregate Amount Beneficially Owned by Each Reporting Person

540,795

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares
(See Instructions)  o

Not Applicable

11.

Percent of Class Represented by Amount in Row (9)

3.6 %

12.

Type of Reporting Person
 (See Instructions)

PN

CUSIP No. 170393102

1.

Names of Reporting Persons/

I.R.S. Identification Nos. of above persons (entities only)

Discovery Group I, LLC

2.

Check the Appropriate Box if a Member of a Group
(See Instructions)

Not Applicable

(a)

o

(b)

o

3.

SEC Use Only

4.

Citizenship or Place of Organization

Delaware

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power

None

6.

Shared Voting Power

622,969

7.

Sole Dispositive Power

None

8.

Shared Dispositive Power

622,969

9.

Aggregate Amount Beneficially Owned by Each Reporting Person

622,969

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares

(See Instructions)  o

Not Applicable

11.

Percent of Class Represented by Amount in Row (9)

4.1 %

12.

Type of Reporting Person

(See Instructions)

OO

CUSIP No. 170393102

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)

Daniel J. Donoghue

2.

Check the Appropriate Box if a Member of a Group

 (See Instructions)

Not Applicable

(a)

o

(b)

o

3.

SEC Use Only

4.

Citizenship or Place of Organization

U.S.A.

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power

None

6.

Shared Voting Power

622,969

7.

Sole Dispositive Power

None

8.

Shared Dispositive Power

622,969

9.

Aggregate Amount Beneficially Owned by Each Reporting Person

622,969

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares (See Instructions)  o

Not Applicable

11.

Percent of Class Represented by Amount in Row (9)

4.1 %

12.

Type of Reporting Person (See Instructions)

IN

CUSIP No. 170393102

1.

Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only)

Michael R. Murphy

2.

Check the Appropriate Box if a Member of a Group

(See Instructions)

Not Applicable

(a)

o

(b)

o

3.

SEC Use Only

4.

Citizenship or Place of Organization

U.S.A.

Number of
Shares
Beneficially
Owned by
Each
Reporting
Person With

5.

Sole Voting Power

None

6.

Shared Voting Power

622,969

7.

Sole Dispositive Power

None

8.

Shared Dispositive Power

622,969

9.

Aggregate Amount Beneficially Owned by Each Reporting Person

622,969

10.

Check if the Aggregate Amount in Row (9) Excludes Certain Shares

(See Instructions)  o

Not Applicable

11.

Percent of Class Represented by Amount in Row (9)

4.1 %

12.

Type of Reporting Person

(See Instructions)

IN

Item 1.

(a)

Name of Issuer

Cholestech Corporation

(b)

Address of Issuer’s Principal Executive Offices

3347 Investment Boulevard, Hayward, California 94545

Item 2.

(a)

Name of Person Filing

Discovery Equity Partners, L.P.  (“Discovery Partners”)
Discovery Group I, LLC, the general partner of Discovery Partners (“Discovery Group”)
Daniel J. Donoghue, a Managing Member of Discovery Group
Michael R. Murphy, a Managing Member of Discovery Group

(b)

Address of Principal Business Office or, if none, Residence

Discovery Partners, Discovery Group, Mr. Donoghue, and Mr. Murphy are all located at:

191 North Wacker Drive, Suite 1685, Chicago, Illinois  60606

(c)

Citizenship

Discovery Partners is an Illinois limited partnership
Discovery Group is a Delaware limited liability company
Mr. Donoghue and Mr. Murphy are U.S. citizens

(d)

Title of Class of Securities

Common Stock, no par value

(e)

CUSIP Number

170393102

Item 3.

If this statement is filed pursuant to §§240.13d-1(b) or 240.13d-2(b) or (c), check whether the person
filing is a:

Not Applicable

(a)

o

Broker or dealer registered under section 15 of the Act (15 U.S.C. 78o).

(b)

o

Bank as defined in section 3(a)(6) of the Act (15 U.S.C. 78c).

(c)

o

Insurance company as defined in section 3(a)(19) of the Act (15 U.S.C. 78c).

(d)

o

Investment company registered under section 8 of the Investment Company Act of 1940 (15 U.S.C 80a-8).

(e)

o

An investment adviser in accordance with §240.13d-1(b)(1)(ii)(E);

(f)

o

An employee benefit plan or endowment fund in accordance with §240.13d-1(b)(1)(ii)(F);

(g)

o

A parent holding company or control person in accordance with § 240.13d-1(b)(1)(ii)(G);

(h)

o

A savings associations as defined in Section 3(b) of the Federal Deposit Insurance Act (12 U.S.C. 1813);

(i)

o

A church plan that is excluded from the definition of an investment company under section 3(c)(14) of the Investment Company Act of 1940 (15 U.S.C. 80a-3);

(j)

o

Group, in accordance with §240.13d-1(b)(1)(ii)(J).

Item 4.

Ownership

Provide the following information regarding the aggregate number and percentage of the class of securities of the issuer identified in Item 1.

(a)

Amount beneficially owned:   

Discovery Partners — 540,795
Discovery Group — 622,969
Mr. Donoghue — 622,969
Mr. Murphy — 622,969

(b)

Percent of class:   

Discovery Partners — 3.6 %
Discovery Group — 4.1 %
Mr. Donoghue — 4.1 %
Mr. Murphy — 4.1 %

The foregoing percentages are based on 15,153,903 shares of Common Stock of the Issuer identified in Item 1 outstanding as of October 31, 2006, as reported in the Issuer’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 29, 2006.

(c)

Number of shares as to which the person has:

(i)

Sole power to vote or to direct the vote   

None

(ii)

Shared power to vote or to direct the vote    

Discovery Partners — 540,795
Discovery Group — 622,969
Mr. Donoghue — 622,969
Mr. Murphy — 622,969

(iii)

Sole power to dispose or to direct the disposition of   

None

(iv)

Shared power to dispose or to direct the disposition of   

Discovery Partners — 540,795
Discovery Group — 622,969
Mr. Donoghue — 622,969
Mr. Murphy — 622,969

Item 5.

Ownership of Five Percent or Less of a Class

If this statement is being filed to report the fact that as of the date hereof the reporting person has ceased to be the beneficial owner of more than five percent of the class of securities, check the following   x.

Item 6.

Ownership of More than Five Percent on Behalf of Another Person

Not Applicable.

Item 7.

Identification and Classification of the Subsidiary Which Acquired the Security Being Reported on By the Parent Holding Company or Control Person

Not Applicable.

Item 8.

Identification and Classification of Members of the Group

Not Applicable.

Item 9.

Notice of Dissolution of Group

Not Applicable.

Item 10.

Certification

By signing below I certify that, to the best of my knowledge and belief, the securities referred to above were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and are not held in connection with or as a participant in any transaction having that purpose or effect.

February 12, 2007

Date

DISCOVERY GROUP I, LLC,
for itself and as general partner of
DISCOVERY EQUITY PARTNERS, L.P.

Michael R. Murphy*

Signature

Michael R. Murphy, Managing Member

Name/Title

Daniel J. Donoghue*

Signature

Daniel J. Donoghue

Name/Title

Michael R. Murphy*

Signature

Michael R. Murphy

Name/Title

*By: /s/ Robert M. McLennan

Robert M. McLennan
Attorney-in-Fact for Daniel J. Donoghue
Attorney-in-Fact for Michael R. Murphy

Exhibit 1

Joint Filing Agreement dated as of February 12, 2007, by and among Discovery Equity Partners, L.P.; Discovery Group I, LLC; Daniel J. Donoghue; and Michael R. Murphy.

Exhibit 2

Power of Attorney of Daniel J. Donoghue, dated as of August 24, 2006

Exhibit 3

Power of Attorney of Michael R. Murphy, dated as of August 24, 2006