Liver X receptors (LXRalpha and -beta) are nuclear receptors abundant in the liver where they are regulators of lipid homeostasis. Both LXRs are also expressed in the brain, but their roles in this tissue remain to be clarified. We examined the brains of mice in which the genes of both LXRalpha and -beta have been disrupted and found several severe abnormalities. One of the most striking features is that the lateral ventricles are closed and lined with lipid-laden cells. In addition, there are enlarged brain blood vessels, especially in the pars reticularis of the substantia nigra and in the globus pallidus. Other features of the brains are excessive lipid deposits, proliferation of astrocytes, loss of neurons, and disorganized myelin sheaths. Electron micrographs revealed that, as mice aged, lipid vacuoles accumulated in astrocytes surrounding blood vessels. Comparison of mRNA profiles in LXR knockout mice and wild-type littermates showed that expression of several LXR target genes involved in cholesterol efflux from astrocytes was reduced. These findings show that LXRs have an important function in lipid homeostasis in the brain, and that loss of these receptors results in neurodegenerative diseases. Further characterization of the role of LXRs in the brain could lead to new insights into the etiology and treatment of some neurodegenerative disorders.