A normal brain function requires constant levels of cholesterol, and the need for constancy seems to be higher here than in any other organ. Nature has met this need by isolation of brain cholesterol by a highly efficient blood-brain barrier. As a low synthesis of cholesterol is present in the brain, a mechanism for compensatory elimination is required. A decade ago we made the unexpected finding that the favoured mechanism for this involves conversion into 24S-hydroxycholesterol, followed by diffusion over the blood-brain barrier. Recent studies by us and others on this new pathway have given new insights into the mechanisms by which cholesterol homeostasis is maintained in the brain. We recently demonstrated a flux of another oxygenated product of cholesterol, 27-hydroxycholesterol, in the opposite direction. The latter flux may be important for neurodegeneration, and may be the link between hypercholesterolaemia and Alzheimer's disease. An overview of the above studies is presented and the possibility that the cholesterol 24S-hydroxylase in the brain may be important for memory and learning and that it may be a new drug target is discussed.