Sterol 27-hydroxylase is an evolutionarily old cytochrome P450 species that is critical for oxidation of the side chain of cholesterol in connection with bile acid biosynthesis in the liver. The wide tissue and organ distribution of the enzyme suggests that it may also have other functions. It was recently shown that some cells (eg macrophages) have a high capacity to convert cholesterol into both 27-hydroxycholesterol and cholestenoic acid and that there is a significant flux of these steroids from extrahepatic sources to the liver where they are further oxidized into bile acids. The magnitude of this flux is such that it may be of importance for overall homeostasis of cholesterol. Very recently it was shown that the brain utilizes a similar mechanism for removal of cholesterol. A unique brain-specific 24S-hydroxylase converts cholesterol into 24S-hydroxycholesterol that is transported over the blood-brain barrier much more rapidly than unmetabolized cholesterol. When 24S-hydroxycholesterol has reached the circulation it is taken up by the liver and further metabolized, most probably into bile acids. This flux is likely to be of importance for cholesterol homeostasis in the brain. This review summarizes our current knowledge regarding oxidative mechanisms for removal of extrahepatic cholesterol. It is evident that some cells utilize these mechanisms as alternatives or complements to the classical HDL-dependent reverse cholesterol transport.