Recent studies reveal that cholesterol may play a role in the pathogenesis of Alzheimer’s disease (AD). Treatment with cholesterol-lowering drugs (statins) appears to lower the risk of developing AD. Amyloid-β (Aβ) production is associated with cholesterol-rich domains (lipid rafts) and cholesterol levels modulate processing of β-amyloid precursor protein (APP) and Aβ generation. The link between cholesterol and Aβ has been revealed in Niemann Pick Type C (NPC) diseases. Loss of NPC1 protein causes cholesterol and sphingolipid accumulation in endosomes/lysosomes and is accompanied by a significant increase in Aβ levels and a shift in presenilin 1 (PS1) localization. The goal of this project is to elucidate the mechanism(s) of cholesterol-effect on APP metabolism and the genesis of Alzheimer’s disease. We hypothesize that cholesterol modulates APP processing both directly and indirectly. Using wild-type cells (wt), NPC knockout (KO) and LDL-receptor KO cells we will test whether changes in cholesterol metabolism and cholesterol levels cause a unique effect on APP processing. We will analyze whether cholesterol affects APP metabolism indirectly by modulating subcellular localization, lipid raft compartmentalization and/or endocytosis of APP, BACE1 and PS1, three key proteins in the pathogenesis of AD. In addition, we will test whether endocytic distribution of cholesterol and sphingolipids in other sphingolipid storage diseases leads to increased Aβ production, like in NPC. We speculate that cholesterol regulation of membrane and protein trafficking along the endocytic pathway leads to amyloidogenic processing of APP. We will analyze whether cholesterol modulates generation of APP-signaling molecule - AICD, in addition to Aβ. To test a direct way of cholesterol action on APP processing we will investigate whether levels of cholesterol/apolipoprotein E (apoE) modulate activity of PS1/gamma-secretase. Lastly, we hypothesize that cholesterol metabolism is altered in patients with Alzheimer’s disease and that this effect is related to apoE genotype. Through these studies we will elucidate the mechanism(s) of cholesterol action on APP processing and the genesis of AD. Finding the molecular link(s) between cholesterol and APP is important both for treating Alzheimer’s disease as well as for understanding normal APP function. Our findings may suggest that maintaining normal cholesterol homeostasis could protect and/or delay progression of Alzheimer’s disease.