Liver X receptors (LXRs) are master regulators of cholesterol homeostasis and inflammation in the central nervous system (CNS). The brain, which contains a disproportionately large amount of the body's total cholesterol (∼25%), requires a complex and delicately balanced cholesterol metabolism to maintain neuronal function. Dysregulation of cholesterol metabolism has been implicated in numerous neurodegenerative diseases, including Alzheimer's disease (AD), Parkinson's disease (PD), and Huntington's disease (HD). Due to their cholesterol-sensing and anti-inflammatory activities, LXRs are positioned centrally in the everyday maintenance of CNS function. This review focuses on recent research into the role of LXRs in the CNS during normal development and homeostasis and in disease states.