Recent epidemiological, clinical, and experimental data suggest that cholesterol may play a role in Alzheimer's disease (AD). We have recently shown that cholesterolemia has a profound effect in the development and modulation of amyloid pathology in a transgenic model of AD. This review summarizes recent advancements in our understanding of the potential role of cholesterol and the amyloid beta protein in initiating the generation of free radicals and points out their role in a chain of events that causes damage of essential macromolecules in the central nervous system and culminates in neuronal dysfunction and loss. Experimental data links cholesterol and oxidative stress with some neurodegenerative aspects of AD.