Abnormalities in neuronal cholesterol homeostasis have been suspected or observed in several neurodegenerative disorders including Alzheimer's disease, Parkinson's disease and Huntington's disease. However, it has not been demonstrated whether an increased abundance of cholesterol in neurons in vivo contributes to neurodegeneration. To address this issue, we used RNA interference methodology to inhibit the expression of cholesterol 24-hydroxylase, encoded by the Cyp46a1 gene, in the hippocampus of normal mice. Cholesterol 24-hydroxylase controls cholesterol efflux from the brain and thereby plays a major role in regulating brain cholesterol homeostasis. We used an adeno-associated virus vector encoding short hairpin RNA directed against the mouse Cyp46a1 mRNA to decrease the expression of the Cyp46a1 gene in hippocampal neurons of normal mice. This increased the cholesterol concentration in neurons, followed by cognitive deficits and hippocampal atrophy due to apoptotic neuronal death. Prior to neuronal death, the recruitment of the amyloid protein precursor to lipid rafts was enhanced leading to the production of β-C-terminal fragment and amyloid-β peptides. Abnormal phosphorylation of tau and endoplasmic reticulum stress were also observed. In the APP23 mouse model of Alzheimer's disease, the abundance of amyloid-β peptides increased following inhibition of Cyp46a1 expression, and neuronal death was more widespread than in normal mice. Altogether, these results suggest that increased amounts of neuronal cholesterol within the brain may contribute to inducing and/or aggravating Alzheimer's disease.