Advances in Alzheimer Disease (AD) research suggest that central nervous system (CNS) lipids play a key role in the pathogenesis. This role is attributed to the rich lipid content of CNS structures and the presence of blood brain barrier which disables the exchange of lipids between CNS and plasma. Among these lipids, cholesterol is a unique molecule provided mainly by its de novo synthesis in the CNS. Special apolipoproteins used for its efficient recycling within the CNS and special oxysterols formed that are specific to brain all contribute to the unique properties of the molecule. Above all, the presence of cholesterol in the membrane enables it to function as a regulator of a number of protein related processes such as the amyloid precursor protein cleavage. Cholesterol reducing agents such as statins are recently proposed to have a protective role in AD. This review will focus on the role of cholesterol metabolism and genetics in AD. Current literature investigating the relationship between cholesterol and AD will be evaluated from the pathophysiological perspective. Genetic studies concerning proteins which are involved in the CNS cholesterol metabolism will also be summarized in the hope that genomics may stimulate further studies and thus contribute to a more clear understanding of the molecular mechanisms in the pathophysiology of AD.