Epidemiological studies have demonstrated that hypercholsterolemia is a significant risk factor for Alzheimer's disease (AD). The mechanism by which increased cholesterol may contribute to AD is unknown. However, as the generation and accumulation of the amyloid Abeta peptide in the brain appears to be significant for the initiation and progression of AD, it is possible that cholesterol levels can regulate Abeta formation and/or clearance. To test the effects of altering cholesterol on Abeta formation, we incubated cells in the presence of lipid depleted serum, with or without the active metabolite of the HMG-CoA reductase inhibitor lovastatin. After confirming that cholesterol was depleted in the cells, we then measured the fraction of Abeta formed from its precursor betaPP under each condition. We observed that cholesterol depletion led to a profound decrease in the levels of Abeta released from the cells. This effect of lovastatin acid was observed at concentrations of 0.05-5 &mgr;M, ranges where this compound is effective at inhibiting HMG-CoA reductase, thereby inhibiting cholesterol synthesis. In contrast, the release of an additional AbetaPP fragment, AbetaPPs, was only modestly reduced by cholesterol treatment. In further studies, we determined that the decreased release of Abeta was not due to its accumulation in the cell, but rather due to decreased formation of Abeta. Finally, we were able to exclude decreased maturation (glycosylation and sulfation) of newly synthesized AbetaPP as a cause for the effects of lovastatin acid on betaPP processing and Abeta formation. Our results demonstrate that reducing cellular cholesterol by the use of an HMG-CoA reductase inhibitor regulates Abeta formation. This effect may involve alterations in the trafficking of AbetaPP and/or alterations in the activity of the proteases that cleave AbetaPP. The results suggest a mechanism by which hypercholesterolemia may increase risk for AD and indicate that reduction in cholesterol may delay the onset and/or slow the progression of AD.