Cholesterol is essential to the functions of the brain, which contains approximately 20% of the body's stores of this sterol. Most brain cholesterol is found in compacted myelin. The operation of the blood brain barrier (BBB) precludes the uptake of cholesterol from the periphery and consequently this sterol is produced de novo in the brain. In contrast, oxysterols – a class of hydroxylated cholesterol catabolites – traverse the BBB readily and facilitate the elimination of cholesterol from the brain. Oxysterols not only act as a transport form of cholesterol, but serve as endogenous regulators of gene expression in lipid metabolism and behave as ligands to nuclear receptors. Two of the more important brain-derived oxysterols are 24S-hydroxycholesterol and 27-hydroxycholesterol. Aberrant cholesterol metabolism has been implicated in a number of neurological disorders. Since oxysterols are thought to reflect the cerebral cholesterol turnover there has been great interest in the diagnostic and prognostic value of these metabolites in neurodegenerative diseases of the brain. The following article provides an overview of the involvement of oxysterols in Alzheimer's disease, multiple sclerosis and spastic paraplegias.