The cholesterol 24-hydroxylase encoded by the gene CYP46 is expressed almost exclusively in central nervous system (CNS) neurons and catalyzes the formation of 24S-hydroxycholesterol (24S-OHC) from cholesterol. This conversion corresponds to a major pathway for excretion of excess cholesterol from the brain. There is a significant flux of another oxysterol, 27-hydroxycholesterol (27-OHC) from the circulation into the brain. Polymorphisms within the CYP46A1 gene have been associated with Alzheimer's disease (AD) incidence. In this study, we examined the effects of 24S-OHC and 27-OHC on the alpha- and beta-secretase activity in the human neuroblastoma cell line SH-SY5Y. Furthermore, we examined the effects of the two oxysterols on the levels of extra- and intracellular proteins of secreted APPalpha (sAPPalpha). Our findings suggest that 24S-OHC may exert a unique modulatory effect on APP processing and that this oxysterol increases the alpha-secretase activity as well as the alpha/beta-secretase activity ratio. The possibility is discussed that the ratio between 24S-OHC and 27-OHC is of importance for the generation of amyloid in the brain.