24S-hydroxycholesterol was identified more than half a century ago and was initially given the name "cerebrosterol" due to the fact that it was abundant in the brain. A decade ago, we showed that the most important mechanism by which cholesterol is eliminated from the mammalian brain involves a hydroxylation into cerebrosterol followed by diffusion of this steroid over the blood-brain barrier. Using an (18)O(2) inhalation technique, we showed that about two-thirds of the cholesterol synthesis in rat brain is balanced by conversion into cerebrosterol. The hydroxylase responsible for the reaction was found to be dependent upon NADPH and oxygen, consistent with involvement of a species of cytochrome, P-450. The gene coding for the cytochrome P-450 responsible for the reaction was later cloned by the group of David Russell in Dallas and the enzyme was found to be located to neuronal cells in the brain. Recent studies by us and others on this new pathway for elimination of cholesterol from the brain have given new insights into the mechanisms by which cholesterol homeostasis is maintained in this organ. In addition, these studies have resulted in new diagnostic and prognostic tools in connection with neurological and neurodegenerative diseases. An overview of the studies is presented here and the possibility is discussed that the cholesterol 24S-hydroxylase in the brain may be a new drug target in connection with neurodegenerative diseases.