Alzheimer's disease is associated with genetic risk factors, of which the allele E4 of apolipoprotein E (apoE4) is the most prevalent, and it is also affected by environmental factors such as early life education. We have recently shown, utilizing apoE-deficient and apoE transgenic mice, that synaptogenesis in the hippocampus following environmental stimulation is affected by apoE. In view of the pivotal role of cholesterol in synaptic plasticity, and of its suggested role in synaptogenesis, we presently examined the effects of apoE and environmental stimulation on brain cholesterol homeostasis. The hippocampal levels of cholesterol and its precursors and metabolites in control mice were not affected by exposure to environmental stimulation. In contrast, the hippocampal levels of cholesterol and its precursors lathosterol and desmosterol and metabolite 24S-hydroxycholesterol were lower in apoE-deficient mice that were maintained in a regular environmental than those of corresponding control mice, whereas they were markedly elevated following environmental stimulation. Histological and immunohistochemical experiments revealed that the combined stimulatory effects of apoE deficiency and environmental stimulation on cholesterol metabolism were associated with marked activation of hippocampal astrocytes and with the abnormal accumulation of cholesterol in neurons and astrocytes. These effects were rescued similarly in apoE3 and apoE4 transgenic mice. These findings suggest that apoE plays an important role in the translocation of cholesterol from astrocytes to neurons in vivo and in the regulation and homeostasis of this process.