The cholesterol-synthesizing enzyme seladin-1, encoded by the Dhcr24 gene, is a flavin adenine dinucleotide-dependent oxidoreductase and regulates responses to oncogenic and oxidative stimuli. It has a role in neuroprotection and is downregulated in affected neurons in Alzheimer's disease (AD). Here we show that seladin-1-deficient mouse brains had reduced levels of cholesterol and disorganized cholesterol-rich detergent-resistant membrane domains (DRMs). This was associated with inefficient plasminogen binding and plasmin activation, the displacement of beta-secretase (BACE) from DRMs to APP-containing membrane fractions, increased beta-cleavage of APP and high levels of Abeta peptides. In contrast, overexpression of seladin-1 increased both cholesterol and the recruitment of DRM components into DRM fractions, induced plasmin activation and reduced both BACE processing of APP and Abeta formation. These results establish a role of seladin-1 in the formation of DRMs and suggest that seladin-1-dependent cholesterol synthesis is involved in lowering Abeta levels. Pharmacological enhancement of seladin-1 activity may be a novel Abeta-lowering approach for the treatment of AD.