Amyloid precursor protein (APP) and cholesterol metabolism are genetically linked to Alzheimer's disease, the latter through apolipoprotein E, a lipid and cholesterol transport protein. We have examined the hypothesis that the processing of APP is disrupted by elevated cholesterol, which is known to modulate the activity of several transmembrane proteins. In the current study, cholesterol, solubilized by methyl- beta-cyclodextrin or ethanol, was added to the culture media of APP 751 stably transfected HEK 293 cells. Radiolabeled APP and APPsol (the soluble N-terminal derivative following alpha-secretase cleavage) were precipitated from lysates and conditioned media of stably transfected HEK 293 cells; the relative levels were determined by quantitative densitometry following separation by SDS-polyacrylamide gel electrophoresis. The data show that cholesterol, solubilized by methyl-beta-cyclodextrin, greatly reduced the levels of APPsol. Low doses of ethanol-solubilized cholesterol similarly caused a dramatic reduction of APPsol. By contrast, levels of APP holoprotein remained the same or increased. The large decrease seen in APPsol production was not due to nonspecific inhibition of secretion because several secreted proteins increased in level. Cholesterol, which impedes membrane fluidity, may lower APPsol production by impeding the interaction of the substrate with its protease(s). If APPsol were to function trophically, as suggested by other studies, the current conclusion suggests that changes in cellular cholesterol levels in Alzheimer's disease could contribute to neuronal degeneration by decreasing the production of APPsol.