Unesterified cholesterol is an essential structural component of the plasma membrane of every cell. During evolution, this membrane came to play an additional, highly specialized role in the central nervous system (CNS) as the major architectural component of compact myelin. As a consequence, in the human the mean concentration of unesterified cholesterol in the CNS is higher than in any other tissue (approximately 23 mg/g). Furthermore, even though the CNS accounts for only 2.1% of body weight, it contains 23% of the sterol present in the whole body pool. In all animals, most growth and differentiation of the CNS occurs in the first few weeks or years after birth, and the cholesterol required for this growth apparently comes exclusively from de novo synthesis. Currently, there is no evidence for the net transfer of sterol from the blood into the brain or spinal cord. In adults, the rate of synthesis exceeds the need for new structural sterol, so that net movement of cholesterol out of the CNS must take place. At least two pathways are used for this excretory process, one of which involves the formation of 24(S)-hydroxycholesterol. Whether or not changes in the plasma cholesterol concentration alter sterol metabolism in the CNS or whether such changes affect cognitive function in the brain or the incidence of dementia remain uncertain at this time.